Legislative Roundup: State revenue projections slip again

HELENA – The Legislature's principal financial forecaster is predicting another $30 million drop in Montana's future revenues.

Analyst Terry Johnson's report blamed the continued erosion on declining insurance-tax payments, smaller-than-expected increases in individual income-tax collections, declines in oil and natural gas production taxes, low crude oil prices, reduced cigarette tax revenues, and a drop in vehicle registration fees.

This report is the third prediction of falling estimates since just before the current legislative session began. Johnson predicted a $135 million revenue decrease in December and another $85 million decrease in January. The total predicted revenue decline is now $250.9 million.

House Speaker Bob Bergren, D-Havre, said the House will probably adopt the latest revenue prediction this week.

Senate President Robert Story, R-Park City, said lawmakers will have to start making big decisions about the budget despite the revenue numbers.

"It's probably right where we were expecting to be," Story said.

So far, the falling projections have lawmakers considering cuts to scheduled increases in spending and not actual deficits that are forcing other states to lay off workers. Still to be considered are the effects the new federal stimulus law will have on Montana’s budget.

Gov. Schweitzer said last week the state should receive at least $600 million in federal money, with much it earmarked for health care, transportation projects and education.

 Montana grads seek help in paying college debts

According to the Montana Guaranteed Student Loan Program, about 70 percent of graduates of the Montana University System have loans to repay after they graduate. Montana’s wages –

among the lowest in the country – are forcing some grads to leave the state to find better-paying work so they can pay off loans.

On Friday, the Senate Taxation Committee heard testimony on a bill that could give graduates an incentive to stay in Montana by giving employers a tax credit for helping their employees pay off student loans.

Senate Bill 304, the “Keep our Kids Here Tax Credit,” is sponsored by Sen. Roy Brown, R-Billings, and would give an employer a tax cut equal to the amount he or she contributes to a qualifying employee’s student loan debt – as much as $5,000 a year for up to three years per employee.

“So many of these kids leave college with high student loan debt, and they just don’t have many choices because they have to go somewhere where they can make enough money to repay their loan debt,” Brown said.

The problem, though, is that any new legislation that isn’t in the governor’s budget faces an uphill battle in what the governor calls a “belt-tightening legislative session.”

Depending on how many employers would claim the credit, the bill could cost the state anywhere from $4 million to $38 million in income tax revenue over a three-year period.

Brown has said that, because Montana is expected to receive federal stimulus money, the state can afford to finance a few tax cuts from its general fund, though most of the stimulus money is likely to be earmarked for specific projects.

Ending gas-tax holiday could raise revenue, cost jobs

Oil and gas industry lobbyists showed up in numbers on Thursday to oppose a bill that would repeal the oil and gas tax holiday in Montana.

Senate Bill 258, sponsored by Sen. Christine Kaufmann, D-Helena, would charge production companies higher tax rates for wells drilled after Dec. 31, 2007, if the price of oil goes over $80 a barrel. Currently, companies have a 12- to 18-month tax holiday depending on the type of well. Kaufmann said the companies can afford to pay higher taxes.

"To say that this industry needs to be on a perpetual holiday, an eternal holiday, is going too far," Kaufmann told the Senate Taxation Committee. She said the $80-per-barrel trigger would give drilling companies a break if times get tough but would also ensure they pay their share when times are good.

Supporters said the holiday cost Montana around $500 million in lost taxes between 2003 and 2007, when the industry was booming.

But opponents stressed the tax-break incentive's importance to drillers considering investments in Montana. They said that if the tax comes back full force, Montana would probably lose good-paying jobs.

However, Kaufmann said the tax incentive plays only a small role in a driller’s investment decision. She said Wyoming has a higher tax rate than Montana but has seen a dramatic increase in oil production despite that.

The governor's office also supported the bill, with hopes that money earned from the tax could go toward funding education.

Bill aims to deny privacy arguments for abortion

State lawmakers heard lengthy and emotional testimony last week on a bill that would have Montanans vote on a constitutional amendment that could pave the way for an eventual ban on abortion.

Senate Bill 46, sponsored by Sen. Dan McGee, R-Laurel, would ask voters to amend Montana's constitutional provision for the right to privacy, which currently says the right "shall not be infringed without a showing of compelling state interest.”

McGee's bill would add one sentence, saying, "The protection of unborn human life is a compelling state interest."

While his bill isn't a direct ban on abortion, it does strike at the legal underpinnings of state Supreme Court rulings that have upheld abortions based on a woman's right to privacy.

The hearing before the Senate Judiciary Committee lasted for nearly three and a half hours, with both sides raising familiar arguments. Supporters of the bill said unborn fetuses have the right to live. Opponents worried about the amendment's potential effects on medical procedures for all pregnant women, not just those seeking abortion.

To make the ballot, the measure would need the votes of 100 of the Legislature's 150 members.

Bill to abolish Montana's death penalty advances

Legislation to abolish Montana's death penalty inched forward last week, heading toward a debate of the full Senate.

The Senate Judiciary Committee voted 7-5 to recommend passage of Senate Bill 236, sponsored by Sen. Dave Wanzenried, D-Missoula. The bill would replace the death sentence with life imprisonment without the possibility of parole.

Floor debate on the bill was scheduled for Monday.

Right-to-Work legislation fizzles in committee

Labor leaders and union members turned out in numbers last week to oppose legislation that would allow Montana workers to choose whether to belong to a union.

When all was said and done, the Senate Business, Labor and Economic Affairs Committee voted 7-4 to table Senate Bill 339, sponsored by Sen. Greg Hinkle, R-Thompson Falls.

Also called the Right to Work Act, the bill would repeal compulsory union membership in Montana. Supporters told lawmakers Montanans should have a right to decide where their money goes and should not have to pay mandatory union fees as a job requirement.

Other supporters told legislators that mandatory union dues hurt Montanans during tight economic times.

But labor leaders said the bill would weaken unions and threaten Montana’s economy.

Evan Barrett, one of the governor's advisers on business issues, said mandatory union membership has not harmed Montana's economy.

“There is no reality to the concept that this is a big interest of the businesses that seek to locate in Montana,” Barrett said.

Unions opposing the bill included the Montana AFL/CIO, the Montana Education Association/Montana Federation of Teachers, the International Brotherhood of Electric Workers, the State Building Trades Association, the Montana Association of Plumbers and Pipe-fitters, the Teamsters, the Carpenters Union and the Montana State Fireman’s Association.

Bill seeks drug testing of driver's education instructors

Montana's driver's education teachers would have to submit to random drug and alcohol testing under a bill heard last week by the Senate Education Committee.

Senate Bill 312, sponsored by Senate President Robert Story, R-Park City, would allow traffic educators to be tested under Montana’s Drug and Alcohol Testing Act. The law allows random testing for workers in potentially hazardous jobs, like airline pilots and school bus drivers.

Story said driver’s education teachers are unique from other teachers in potentially dangerous classrooms, like science labs or woodshops because they aren’t under direct supervision.

The bill was supported by the Montana Association of Superintendents and the Montana School Boards Association.

But Jane Hamman, representing the Montana Traffic Educators Association, said the bill is unnecessary and insulting to traffic educators.

Marco Ferro of the Montana Education Association/Montana Federation of Teachers said the bill would be discriminatory.

Other opponents said the bill would create unreasonable cost for school districts in tough financial times and that drug and alcohol abuse is not a common problem among driver’s ed teachers. They also said the bill could make hiring such teachers even tougher. The job, they said, is already stressful enough.

Story said hiring may get more difficult, but the bill would ensure schools don’t hire “anyone who comes along.”

Huckleberry flapjack bill flops in committee

Lawmakers in the Senate Agricultural Committee voted 6-3 Friday to table a bill that would make the whole-wheat huckleberry pancake a Montana state symbol.

Sen. Carolyn Squires, D-Missoula, sponsored Senate Bill 232 on behalf of third- and fourth-grade students in her district who thought that whole wheat and huckleberries represented the whole state.

Opponents of the bill said it was an unnecessary use of Montana's time and finances.

(Molly Priddy is a University of Montana School of Journalism student who works for Community News Service).