Sunday, December 10, 2023

Governor cites ‘historic’ tax relief, Dems say only for the wealthy

by Nicole Girten Daily Montanan
| March 17, 2023 7:00 AM

Gov. Greg Gianforte touted historic tax relief on the steps of the Montana capitol on Monday as he signed into law six tax slashing bills into law – and one that changes corporate income taxes.

The bills include a cut to income tax for top earners from 6.5% to 5.9%, a property tax rebate of $500 per household, and lowering capital gains taxes, or taxes paid by investors after selling assets like stocks.

The governor also signed a bill that would allocate $100 million in surplus to be spent on infrastructure projects in increments of $15 million a year.

“Today, we’re making it easier for Montanans to raise a family to earn a good living, to own a home, to retire comfortably, and achieve their American dream,” Gianforte said during the bill signing ceremony. “To help get them there, we’re going to deliver on one of their priorities. And that’s tax relief.”

Democrats said these bills signify $1 billion in spending that benefits the wealthy.

In a joint statement, House Minority Leader Kim Abbott, D-Helena, and Senate Minority Leader Pat Flowers, D-Belgrade, said the bills do nothing to help working- and middle-class families get through the cost of living crisis.

“The way this package was structured and rushed raises serious questions about its constitutionality,” the statement read. “In the continuing absence of any real plan from the GOP, Montana Democrats will keep fighting to fix the crises facing ordinary Montanans.”

Bills signed into law:

SB 124: changes Montana corporation income tax apportionment or multi-state businesses. The bill would add more than $17 million to the general fund by 2027. In a release, Gianforte’s office said this bill modernizes Montana’s corporate tax code “to boost job creation and investment” and was part of his initial budget proposal.

HB 212: would expand the exemption for business equipment property tax, changing it from $300,000 to $1,000,000 and provides for reimbursement from the state general fund for forgone revenue for local jurisdictions, according to the fiscal note. Gianforte said this would take 5,000 businesses off the tax rolls.

SB 121: Lowers income tax for the top earners in the state from 6.8% to 5.9% and increases the earned income tax credit, which helps lower income Montanans, from 3% to 10%.

HB 222: Provides a property tax rebate up to $500 for “tax year” 2022 and 2023. The fiscal note for the bill says it would impact 292,000 households in the state, exempting nearly 17,000 mobile homes with less than $10,000 in assessed value, and 2,664 households enrolled in the Montana Disabled Veteran program.

HB 192: Income tax rebate for full-time residents. The credit is equal to the lesser of $1,250, or $2,500 for joint returns

“We said ‘We’re going to shock the public,’” said Rep. Bill Mercer, R-Billings. “We are going to actually take money out of the Treasury and give it back to them because we have over collected and we made good on that promise, in short order as the governor said.”

HB 221: Cuts net long-term capital gains taxes, which are tacked on during sales of assets like stocks, livestock and real property held longer than a year, from 30% to under 5%. Gianforte said this reduction made it the fourth lowest capital gains tax in the nation.

The Montana Budget and Policy center said in a release Monday that a model of SB 121, HB 221, HB 192, and HB 222 found the top 1% earners in Montana will see more than $9,000 in annual tax cuts from these bills.

“While those with incomes up to $46,000 will see a few hundred dollars on average, most of which is one-time,” the release read.

The governor also signed HB 251, the “debt free in ‘23” bill, would create a state special revenue fund to be used to pay principle, interest, and other costs related to the state’s outstanding bonds or obligations. The governor’s office said this would save the state $40 million during two years in principle and interest payments.

An infrastructure bill aimed at repairing roads and bridges, HB 267, was also signed into law. It would send $100 million of surplus funds to an Montana Department of Transportation account with a cap of $15 million per year to be dispersed for a variety of projects.

“Too often, the state leaves federal dollars on the table. Our historic investment to repair our infrastructure will allow us to better leverage federal funds,” Gianforte said.