Shifty Tax Plan

By Beacon Staff

In the past, Montana Power Company lobbied a GOP-controlled state Legislature with the seemingly simple notion of deregulating the industry.

The GOP signed deregulation into law, ridding Montana of the lowest electricity rates in the country while drastically cutting property taxes for major power and telecommunications industries.

Big industry’s property taxes were cut in places like Columbia Falls. A large portion of school financing shifted onto the only remaining tax base in the districts: homeowners and small business owners.

Statewide deregulation – coupled with its considerable industry tax cuts – forced homeowners and downtown businesses to suddenly pay significantly more for public services like education, or police and fire protection.

Columbia Falls’ schools led a coalition of likeminded schools, and successfully sued the state of Montana for a fairer funding mechanism for public education.

The court agreed, saying that the state had to do better.

The 2005 and following Legislatures provided substantially more state money from the general fund – predominately comprised of income tax collections.

Montana wage earners absorbed the cost of the property tax cuts, which previous GOP-controlled Legislatures gave to big industry.

Mom-and-pop businesses are not currently classified like the big multinational utilities. Differing classes of properties use individualized property tax rates based upon the political will of the Legislature.

Recently, there was big tax news reported from an interim tax committee as it heads into the 2013 Legislative Session.

If Republicans control the 2013 Montana Legislature Sen. Bruce Tutvedt, R-Kalispell, stated that he is confident the GOP will pass a bill to substantially lower property taxes for big industry. He agrees that there would be a tax shift onto homeowners and downtown businesses to pay for local services.

“We’ve got to take the political hit of the tax shift,” Tutvedt said. “If you’re going to be fair, then you shouldn’t get hit.”

Democratic Gov. Brian Schweitzer warned that people should remain suspicious of property tax shenanigans that shower big industry with special consideration.

“What they’re proposing is a great tax shift in favor of out-of-state and multinational corporations in Montana – a shift from those paying the taxes to small businesses and homeowners in Montana,” Schweitzer said.

“They’ve decided that they can hire lobbyists on both the Democratic and Republican side and pull the wool over legislators. This is the same cast of characters that brought us utility deregulation. What could go wrong?” Schweitzer continued in statewide news reports.

What could – and will – go wrong is homeowners and downtown business owners will again pick up the cost for wrongheaded policy.

The Montana GOP talks about cutting taxes, but apparently do not mean local homeowners or downtown business owners. It should refocus tax cuts onto locals.

The GOP-deregulated power industry produced big losses for homeowners and retirees. Lawmakers still refuse to cap property taxes for people living in their homes and routinely cater tax policy toward multination corporations.

As a result of tax base shifting, homeowners and small business owners are responsible statewide for nearly two-thirds of the cost of local services like police protection and education. No wonder Montanans are feeling “taxed enough already.”

The GOP approach to shift more of big industry’s responsibility of local property taxes onto homeowners is silly. The Flathead already pays more than its fair share of statewide property taxes.

Homeowners, renters, and small business owners should take a hard look at how hardcore ideology has played out on the policy side of politics. Policies like deregulation resulted from fanatical politics and hit the pocket books of ordinary businesses and people pretty hard.

The last Legislative Session aptly demonstrated the need for moderate and time-proven leadership to be again sent to Helena to straighten out this developing tax mess.

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