The revolution is slowed

Occasionally a bill is breathtaking in it’s revolutionary bend. I’m listening to an earnest freshman propose that we consider the elimination of the business equipment tax. The bill comes with a fiscal note just south of $100 million.

We had already passed a far more modest proposal from the governor’s office, one that raised the exemption from the tax to $200,000. This means a restaurant, tire shop or ranch, heavy on equipment, will not pay the 1.5% tax on their equipment until they reach the new threshold. It too has a fiscal note, one that comes in at about $3.8 million per year. A long line of proponents from Main Street, Montana along with our ranch and farm community exalted the benefits of the bill.

The freshman legislator who presented the bill to eliminate the tax had no proponents. The conservative leaning and liberal leaning tax organizations were among the opponents of the bill. Within 24 hours our committee unceremoniously tabled the bill, no discussion, just the understanding that such a fiscal note would seriously disrupt the program and likely raise the governor’s ire in a sure veto.

Another freshman legislator proposed the elimination of the state tax on social security. This too had a $100 million fiscal note. From an aspirational perspective, and if I could reinvent our tax policy, I too would support this bill. Gov. Greg Gianforte chose to cut $100 million from former Gov. Steve Bullock’s budget. He also includes tax cuts and credits aimed to attract new business in Montana. At this point, as he wets his feet in state government, revolutionary proposals to eliminate such taxation is not in his cards.

The sponsor made a compelling presentation suggesting that the federal government was taking dollars and then such a taking was being taxed at the state level. Two proponents, citizens from Helena and East Helena were present and expounded upon the sponsor’s philosophy. Opponents reminded the committee that the state already allows Montana’s with modest incomes to be exempted from the tax. Incrementalism is not revolutionary but may serve as a more realistic method of change. This bill did receive some support. It was not tabled before discussion could commence and several Republicans supported the bill, but failed to move on to the house floor.

I too will exhibit revolutionary traits when I bring a bill to provide tax credits for Montanans who pay too much of their income for property taxes including those passed on in their rents. A similar bill could not get out of a Senate Tax, so I copied and pasted policy from the state of Maine which provides such a credit.

Montana provides relief through programs like the elderly homeowner and renter tax credit or the property tax assistance program (PTAP) and other programs including disabled veterans and folks who may have highly appraised property with a modest dwelling on the land, but leaves a significant gap including middle income homeowners and renters. This bill would not be enacted until the subsequent biennium and provides ample time to build the budget for such a credit.

Someday, property tax relief will be a priority of the governor. Not now, though. Budget Director Kurt Alme sympathized with the plight of folks impacted by irrationally high appraisals but exclaimed the obvious point, “It will be expensive to provide such relief.”

We are halfway through the 67th legislative session. If the term revolution is an appropriate descriptor, we will likely see additional support for public education including statutory funding regular and special education and additional funding to boost the wages of newly hired educators.

County health departments will likely shed some of their autonomy as they will require more oversight from elected officials, there will likely be restrictions on abortions starting at 20 weeks of pregnancy, and we will include hydro and nuclear energy in the states renewable energy portfolio.

Democrats are weakened but a sizable number of Republicans carefully wield their power. The revolution will be tempered by budgetary restraints and a reluctance to blow up the system.

Democrat Rep. Dave Fern of Whitefish represents House District 5 in the state Legislature.