HELENA — On Monday, March 13, 2023, Governor Greg Gianforte and Republican state lawmakers celebrated at the State Capitol, as Gianforte signed into law a package of bills that they called big steps for Montana taxpayers.
“It's interesting standing here behind the statue of Thomas Meagher,” said Sen. Greg Hertz, R-Polson. “We're here leading the charge just like he was, we're leading the charge for taxpayers all across this state.”
Gianforte signed eight bills that together use more than $1 billion of the state’s budget surplus for tax rebates and investments, and establish hundreds of millions of dollars more in long-term tax reductions.
“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,” he said.
One of the most notable bills, House Bill 192, sets aside $480 million of the surplus to provide income tax rebates – up to $1,250 for those filing individually and $2,500 for those filing jointly.
“I think this legislation is a promise delivered,” said Rep. Bill Mercer, R-Billings, who sponsored HB 192. “When we ran our campaigns in the fall, we said we're going to shock the public: We are going to actually take money out of the Treasury and give it back to them, because we have overcollected.”
House Bill 222, sponsored by Rep. Tom Welch, R-Dillon, uses another $280 million to provide property tax rebates of up to $500 each of the next two years on Montana property owners’ primary residences.
“I think this is the first step,” Welch said. “I think we’re building a foundation here, and over the next few sessions, I think we can do better.”
Senate Bill 212, sponsored by Sen. Becky Beard, R-Elliston, will make two large tax changes: dropping the top income tax rate from 6.5% to 5.9%, starting in 2024; and more than tripling the state earned income tax credit for lower-income families. A budget analysis estimates that will reduce future tax collections by more than $500 million over the next three years.
“This is going to help our economy; it’s going to put more money in our own pockets; and we’re going to be able to thrive just a bit better,” said Beard.
The other bills Gianforte signed were:
- House Bill 212, sponsored by Rep. Josh Kassmier, R-Fort Benton, which exempts businesses from paying the state’s business equipment tax on equipment valued up to $1 million. The current exemption is at $300,000.
- House Bill 221, sponsored by Welch, replaces the current tax rates for long-term capital gains with reduced rates for those gains.
- House Bill 251, sponsored by Rep. Llew Jones, R-Conrad, puts $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, places $100 million into a new state account, where it can be used as matching funds to secure federal road and bridge grants.
- Senate Bill 124, sponsored by Hertz, simplifies the state’s corporate income tax calculations to use a single factor based on sales, starting in 2025.
The six House bills became known around the Capitol as “the six-pack,” after a legislative committee added “coordinating language” tying the bills together. It would have reduced the amount spent on each of the bills if any of them failed to pass. GOP leaders said that step was intended to make sure the package didn’t leave any group of Montanans out.
Throughout the session, Democratic lawmakers have been critical of the Republican majority for advancing the package so quickly, and for how the benefits would be distributed. House Minority Leader Rep. Kim Abbott, D-Helena, and Senate Minority Leader Sen. Pat Flowers, D-Belgrade, released a statement Monday repeating that opposition.
“What the Governor signed into law today is over $1 billion in reckless spending that disproportionately benefits the wealthiest Montanans,” they said. “It does 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. In the continuing absence of any real plan from the GOP, Montana Democrats will keep fighting to fix the crises facing ordinary Montanans.”
A spokesperson for Gianforte’s office said, now that these bills have been signed, the Montana Department of Revenue will begin working on plans for implementing the tax rebates. They expect the income tax rebate will be distributed automatically, sometime later this year. For the property tax rebate, there will be steps for homeowners to claim it, and those will come out later in the year as well.
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