News68th Session


Montana House endorses package of tax reduction, budget bills

Montana House Tax Bills
Posted at 8:20 PM, Feb 01, 2023
and last updated 2023-02-02 10:08:56-05

HELENA - The Montana House has given initial approval to a package of budget and tax bills, including several tax policies endorsed by Gov. Greg Gianforte.

House members passed six bills on an initial vote on Wednesday. Together, they allocate about $1 billion from the state’s more than $2 billion budget surplus and make additional longer-term changes to tax rules:

  • House Bill 192, sponsored by Rep. Bill Mercer, R-Billings, would use $480 million of the surplus to provide income tax rebates of up to $1,250 for those filing individually and $2,500 for those filing jointly.
  • House Bill 212, sponsored by Rep. Josh Kassmier, R-Fort Benton, would exempt businesses from the state’s business equipment tax if they have less than $1 million. The current exemption is at $300,000.
  • House Bill 221, sponsored by Rep. Tom Welch, R-Dillon, would replace the current tax deduction for long-term capital gains with a reduced tax rate for those gains.
  • House Bill 222, sponsored by Welch, would use about $280 million in surplus funds to provide property tax rebates of up to $500 each of the next two years on Montana property owners’ primary residences.
  • House Bill 251, sponsored by Rep. Llew Jones, R-Conrad, would put $150 million toward paying off state debt, with the goal of reducing future required payments.
  • House Bill 267, sponsored by Rep. Courtenay Sprunger, R-Kalispell, would place $100 million into a new state account, where it would be used as matching funds to secure federal road and bridge grants.

Five of the six bills passed almost entirely on party lines, with majority Republicans in favor and minority Democrats opposed. HB 267 passed unanimously.

Republicans said the package would take important and quick steps to return surplus money to the Montanans who paid it in taxes. Democrats called the bills “giveaways” to the wealthy and said the money would be better invested in addressing statewide needs.

Earlier in the session, some of these bills had overlapping provisions, but they were amended in the House Appropriations Committee to bring them into alignment. The committee also added “coordinating language,” stating that the amount spent on each of the bills would be cut in half if any one of the package failed to pass.

During Wednesday’s debate, House Speaker Matt Regier, R-Kalispell, said tying the bills together was the best way to ensure that no group of Montanans was “left out” from the benefits of returning the surplus.

“One of these ideas alone might be preferable to you over the next; I know each of us have our own ideas of how to be stewards of this money,” he said. “I know there are good ideas that you have, but your seatmate also has good ideas. We’re a vast array of legislators; we have a vast array of ideas.”

Democrats objected to the move, saying GOP leadership was rushing the process, and they should wait for more revenue information before making a final decision on how to use the surplus. They unsuccessfully proposed amendments to remove the coordinating language from each of the bills.

“With this type of deal where they're all tied together and they all go or none of them go, what happens is the public doesn't have the input that they need to have,” said Rep. Mary Caferro, D-Helena. “It cuts out public process, it's complicated, it's insider game.”

The House is expected to take a final vote on the bills Thursday. If they pass, they’ll move on to the Senate for consideration.