Court Dismisses Challenge to Tax Rebate

By Beacon Staff

HELENA (AP) – A judge on Thursday dismissed a lawsuit claiming the Schweitzer administration illegally authorized a $140-per-homeowner tax credit.

District Judge Thomas Honzel of Helena said that state Sen. John Cobb did not have standing to bring the lawsuit against the state.

Cobb, a Republican from Augusta, argued the appropriate trigger for the extra $140 tax credit scheduled for 2008 had not been met and asked the court to reverse the move.

Gov. Brian Schweitzer said his office followed the intent of the law. Attorney General Mike McGrath, who represented the state in the lawsuit, welcomed the quick decision.

“Thanks to the timely decision of the court, the state can go ahead and process the tax credits as previously authorized by the Schweitzer administration,” he said in a statement. “This was a time-sensitive case, since state income tax information will be showing up in our mailboxes any day.”

Cobb, known as a principled and independent lawmaker, said he didn’t oppose the tax rebate, he just wanted to make sure the proper methodology was followed.

The administration certified revenues above the level needed to authorize the extra rebate. Cobb and others said a correct calculation shows the criteria wasn’t quite met.

During a special legislative session in May, lawmakers passed a law saying if tax revenues for the fiscal year ending June 30 topped $1.802 billion, any excess money would go back to taxpayers as income tax credits the next year. Cobb said proper accounting principles show revenues are slightly less.

Cobb said he “probably” won’t file an appeal. He said the issue would be moot by the time the Montana Supreme Court could hear the case, since the tax credit would probably already have been sent out.

He said it’s unfortunate a court won’t get to decide the merits of the case.

“That’s the way it goes. I did what I thought was right,” Cobb said.

Honzel said Cobb didn’t allege “any particular injury to his property rights or his civil rights.”

He said Cobb’s status as a lawmaker who voted on the bill alone does not give him standing to bring a lawsuit.

“Because Senator Cobb has not alleged a personal injury, the court concludes that he does not have standing to maintain this action,” Honzel wrote in his decision.