Helena update: Rep. Janna Taylor

Here I sit among citizen legislators, many teachers, lawyers, real estate agents and retirees. We need to decide how much the next two year’s state income and spending will be.

In my House Taxation Committee, we’ve been having informational sessions from the Department of Revenue. Director Dan Bucks said that now that I’ve moved to tax from appropriations, I’ll be one of the few legislators who understands both sides, income and spending.

The House Taxation Committee hears the revenue estimate, House Joint Resolution 2. This is the revenue number that is used to determine if the budget is balanced.

We have revenue estimators on staff, but in this changing economy the numbers are not very stable. In fact, one of our fiscal analysts was given a crystal ball award by the governor and a Dr. Doom T-shirt in my Interim Finance Committee last November.

I know that you are not surprised to hear that state revenue is decreasing. The latest forecasts indicate that there is not enough to cover the previous budget, the automatic increases required, fire suppression savings, and the cost of the I 155 initiative, the children’s health care.

What would be an automatic increase? This is spending that is required by previous law. Inflation is example.

Another is required services, like the number of guards required per prisoner, debt service payment, public defender’s case load, the number of students (ANB), or more people eligible for a health and human service’s benefits.

If revenues continue to go down, what services can we reduce? More Montanans are applying for unemployment and social services. The last two budget surpluses should not have been spent.

The budget starting point is based on the previous year. Since 2005 the budget has increased more than 40 percent. We have to think long term.

Still, legislators from both parties agree that we need to be good stewards of the peoples money. We all agree on no significant new spending. To all our benefit the Montana Constitution requires that we balance the budget.

As I write this, I realize that my mind is still on the spending side rather than the income side on state government. But I am learning a lot on the tax committee.

Early last year, a barrel of oil at $128 bolstered our revenues quite a bit. So, 2008 looked pretty good. Now that it’s less than $50 that revenue increase is gone.

Montana’s largest revenue source is individual income tax and that has been up the last few years, until now. Individual income is going down as are capital gains.

Corporate taxes are already falling. Wyoming, Washington and South Dakota have no corporate income tax. It’s no wonder that businesses do not like to base here. In fact, we tax coal more than any other state, twice as much as Pennsylvania and much more than Wyoming and our environmental laws are stricter.

Education funding is still far to complicated. Property tax is the number one source of funding for schools, both local and state. Federal money and the state general fund make up most of the rest.

I have often written about the decrease of students in Montana. In 1996, we had 165,000 students in K-12. Now it’s down to 142,000. That’s more than 1,700 per year.

We need good paying jobs to keep our young families here. But there is a ray of hope. The birth rate has increased and schools should see an increase within the next few years. In fact, Polson has the largest kindergarten class it has had in many years.

I will work to stop property tax increases. As I wrote in last year’s column, there are several tax relief program offered by the state. Some must be applied for early in the year. The best way to see if you qualify is to call or visit the local Department of Revenue office in Polson.

Many of us would like to see more openness in our state government. The governor’s proposed budget is on line at www.mt.gov, but I’d like to see the actual spending by agency listed. Let’s put the state checkbook online.

I have so many well informed constituents. I’d like to thank everyone that has contacted me. Don’t stop now. Let me know your opinions.

Leave me a message at 406-444-4800, write Representative Janna Taylor, State Capitol, PO Box 200400, Helena, MT 59620-0400, or e-mail me at jannataylor@montana.com.