How the governor compromises
By Rep. Janna Taylor
HD 11
Last weekend I heard a short speech by Jerry Brown, the Dean of the University of Montana School of Journalism. He made several interesting observations.
If you don’t like a free media and political conflict, move to North Korea. Everyone there agrees. Having different opinions is actually a plus. Still, we have to come to some conclusions about our budget.
How does our governor compromise? According to his quotes in the paper, he’s going to find what he calls a “moderate” Republican to agree to his budget and vote with the Democrats.
I don’t care how you feel about our budget one way or the other, but that is not compromise. Can he do it? Maybe. He’s been making calls.
Republican legislators have reduced the amount of money that we want for permanent tax reduction from $300 million to $180 million. But our governor is insisting on his budget. He even calls it “his.” Perhaps he’s forgotten that the budget belongs to the people.
All parties actually agreed on several budget issues. We repealed the water tax and lowered the unemployment tax by a small fraction. Although it died in committee when we adjourned, most everyone agreed on a renters’ credit or rebate.
There was agreement on reducing class 8 property taxes. The amount and the percents differed by party, but at least we agreed to do something there.
So, where are the differences? The governor’s property tax rebate is for $400 or $600 for each resident that has owned their home for at least three years. Regardless of how much they paid.
The Republican plan has the state paying a larger share of school funding. This will lower the amount each property owner pays for schools. Then there would be a state income tax credit based on a portion of the amount local school costs.
The Republicans want these changes permanent and the governor’s plan is one time only. He says we can change the rules next session. That very seldom happens.
Here’s a quick refresher on Montana’s budget. Most of the money that the state spends is actually federal dollars. The uses for this money are determined by the feds, like for highways, schools or health care.
Because of this, we usually discuss “general fund money” because that is what we Montanans control.
Individual income taxes are 45 percent of our money, about $825 million this year. Remember that Wyoming has no income tax and they usually have more surpluses than we do. But, they have sales tax.
The state’s share of your property taxes is about $202 million per year or 11 percent of general fund. Our third source of income is corporate taxes, about $160 million per year or 9 percent.
Natural resource money comes in several ways; coal trust interest, US royalty payments and production taxes. Together they account for about 14 percent.
So, even though income taxes support our state, we talk the most about property tax reduction. Income taxes seem fair because the more you earn the more you pay. Property taxes do not seem as fair.
If someone pays more for a piece of property just like yours, your property taxes increase. If values go down, your taxes do not decrease.
Most of the reductions and rebates of property taxes are deducted from your state income taxes. If out of state homeowners drive property taxes higher we can get refunds on income tax as residents and they can’t.
Out of state owners would not benefit from the Republican income tax credit based on school costs. All property tax payers would benefit from the first part of the Republican plan, the state paying a larger share for schools.
I believe all property taxpayers should have some benefit. After all small businesses employ most workers in Montana and we need jobs for our youth.
We are hoping for a bi-partisan compromise. Not a backroom state job offer or vote trading deal. Personally, I hope it’s resolved soon because I need to go help my sister after her brain surgery.
Call me at home 849-6096 or email me at jannataylor@montana.com