Republican lawmakers in the House are running out of time to pass their two priority tax-cut bills through the legislature. HB230, sponsored by Rep. Scott Reichner (R-Big Fork) and HB472, sponsored by Rep. Jerry Bennett both need to clear out of a very busy House Appropriations Committee by Monday to realistically make the transmittal deadline for spending bills next Thursday.
The Appropriations Committee has already passed their $9 billion dollar two-year budget plan. At this point, the budget is about one percent over what the Governor requested and leaves an ending fund balance about $175 million less than the current balance.
“Is there room for this property tax bill included in that?” Asked Reicher about his HB230. “We’ll see.” Reichner’s bill cuts property taxes in half–across the board. It would remove about $100 million in income from the state budget over the next two years.
“It rewards the property taxpayer from across the state of Montana,” Reichner said, “Whether you’re residential, ag, coal, mining, commercial–you’re getting a…fair flat tax reduction.”
Representative Bill McChesney (D-Miles City) sits on the House Appropriations committee. He says he generally thinks cutting property taxes is “the right thing to do” but in the case of Reichner’s bill, “that will saddle the state of Montana with potential negative consequences into the future.” McChesney says the budget that was unanimously passed out of the House does not have enough extra money to make that tax reduction sustainable.
Reichner says it depends how much money the Legislature wants to leave in the bank for the next session–that ending fund balance. As of Friday, using the current House Budget, that ending fund balance is $291.4million.
“We’ve done anywhere from $50 million to $500 million in ending fund balance, just depending on what the forecast for the next two years are gonna be,” Reichner said. By law, that ending fund balance cannot drop below $41.8 million for this budget.
Rep. Bennett’s bill would drop the business equipment tax by increasing the exemption to $250 thousand (read about what that means here.) That bill would lower the budget by $22.5 million.
Governor Bullock’s top tax proposal, a one-time $400 tax rebate to homeowners, failed to reach the House floor. As for the other tax-cut bills, Bullock says he will wait until they reach his desk before he makes any decisions. “All of the tax bills, the questions I ask (are) ‘Long term, what’s it do to the budget?’ and also ‘Is the benefit going to mainstreet Montana, or elsewhere?'”