Senate Panel Hears Bill That Would Reduce Income Taxes

Bill would deplete the state's $350 million rainy day fund to reduce income taxes over time

By LISA BAUMANN, Associated Press

HELENA — A Republican lawmaker from Colstrip has proposed a bill that would deplete the state’s $350 million rainy day fund to reduce income taxes over time.

Sen. Duane Ankney introduced the bill Thursday in the Senate Taxation Committee. “The state has no money. They have your money,” he told lawmakers.

The approximately $350 million surplus is championed by Democratic Gov. Steve Bullock, who says it’s necessary to cover any unforeseen costs related to firefighting, floods or government shutdowns.

The bill’s only supporter to speak was Glenn Oppel with the Montana Chamber of Commerce who said his members asked the chamber to support tax relief this year. Oppel said tax breaks would result in more money spent on Montana main streets.

But Montana Budget and Policy Center co-director Heather O’Loughlin opposed the bill, saying it’s unfair to low-income workers. Under the measure, the top 1 percent of earners making about $455,000 a year will get a tax break of $1,100 per year, O’Loughlin said. People earning about $27,000 per year will only see a tax cut of $28 annually, she said.

Although Ankney started the hearing by saying the bill intends to give money back to “the blue-collar guys,” he acknowledged by the end that those at the top would receive more money. He added that those receiving higher tax breaks might give raises to the blue-collar workers.

“Yeah, there is more money going out of this to those in that top earning, but that’s the people that’s hiring the blue collar guy,” Ankney said.

Eric Feaver with the labor union MEA-MFT said that if all the bills cutting taxes pass this session, Montana will look like Kansas, a state facing projected shortfalls totaling more than $710 million in the current budget.

“This is a fiscally prudent state,” he said. “Why would we endanger our ability to go forward in a fiscally prudent way when we could take those dollars we have available now and secure them in our ending fund balance and at the same time provide for the needs of our citizens?”

The bill is estimated to cost the state about $70 million per year starting in 2017. Ankney said he was “rocked a little bit” upon seeing the figures and said he was thinking more of $50 million per year. As a “horse trader” though, he said he’d be willing to work with lawmakers to bring the annual cost down.

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