UPDATE: Judge Strikes Tax Initiative from November Ballot

By Beacon Staff

HELENA – A judge ruled that a legislative referendum calling for income tax credits if state revenue comes in higher than lawmakers expected is unconstitutional and cannot appear on the November ballot.

District Judge Jeffrey Sherlock made the determination Tuesday in a lawsuit filed by four labor unions and another group seeking to have Legislative Referendum 123 removed from the general election ballot, Lee Newspapers of Montana reported.

Sherlock said the referendum is an unconstitutional delegation of power by the Legislature to a legislative fiscal analyst acting on behalf of lawmakers.

“Everyone, including the undersigned, would like to see a tax credit or refund,” Sherlock wrote. “The Legislature could do so itself or could properly delegate this function to an executive agency. However the Legislature cannot delegate its power to one of its employees.”

Legislative Referendum 123 was challenged by MEA-MFT, Montana AFL-CIO, Montana Association of Area Agencies on Aging and the American Federation of State, County and Municipal Employees Council 9

“This is amazing,” MEA-MFT President Eric Feaver said Wednesday. “Well, bless Judge Sherlock because he’s right. The Legislature was giving away its authority.”

LR-123, if adopted by voters, would have required the state Revenue Department to issue income-tax credits if the actual state general fund balance exceeded the legislative projection by a certain percentage and dollar amount.

It was one of several referendums the Republican-led Legislature placed directly on the ballot, bypassing potential veto by Gov. Brian Schweitzer.

Another was removed from the ballot earlier this spring. The Montana Supreme Court upheld a lower court ruling that struck a proposal to have justices for the high court elected from geographical districts instead of through statewide elections. It was called an attempt to change constitutional election requirements without a proper amendment to the Montana Constitution.

Former state Sen. Joe Balyeat, R-Bozeman, who sponsored both measures, said he was not surprised.

“The courts have basically seized control of the political process,” said Balyeat, who resigned from the Senate on Monday for unrelated reasons.

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