It’s Moving! Tax It!

Montana’s government now must make $227 million in “hard” cuts, a lot of dough

By Dave Skinner

For complex reasons, Montana’s budget is coming up short this year. Everyone’s talking about it, so I might as well take my turn.

Before I get into that, however, I should warn you that my attitude about taxes was shaped early by those great Republicans, the Beatles. Yep! When they first got famous, the British Crown wouldn’t let them get rich: “That’s one for you, nineteen for me …” When the Beatles then tried and failed to dodge the taxes, they moved to America! Go ahead, listen to the lyrics, Taxman on 1966’s Revolver album. Play it loud as you read on.

The latest damage estimate on Montana’s shortfall is $227 million until the end of the cycle, mostly because certain tax streams haven’t produced as expected, especially natural resources. Under law, Montana can’t print money — our budget must balance. Funds must either be left unspent, or made up with new taxes.

The political screaming really got going this summer, when the wildfire budget, which was already robbed of $30 million to balance the official budget, had the remaining $30 million blown sky high. The net effect? No “slush fund” money to be re-assigned this fall. Poof!

Montana’s government now must make $227 million in “hard” cuts, a lot of dough, which is part of the really big number of $10.3 billion, our total state budget for two years. So these coming cuts are actually only about 2.1 percent of the total — for a private sector person, a week’s furlough. Most of us can, and have, made such an adjustment — as long as adjusting doesn’t become a habit.

So Montana Democrats, led by Gov. Steve Bullock, are fighting with Montana Republicans over whether or not to call a special session. The GOP wants Bullock to make the cuts himself, which he can. Bullock would, of course, prefer to force the GOP to choose in a special session where Bullock holds the veto pen. Whoever holds the knife will take the blame, of course.

The general consensus is, if Bullock calls the session, he will attempt again what Republicans prevented in the regular session this past winter, state tax increases. To deflect opposition, the tax increases will be focused on the “sin tax” category, those punitive taxes laid on disfavored constituencies — tobacco, booze, and tourists.

I mean, that’s classic rob-Peter-to-buy-Paul’s-vote thinking. I’ll bet there are demographic studies showing smokers and drinkers vote less … and tourists? Yes! They can’t vote! Tax them!

Even better, spin is the increases will be “temporary.” Oh, sure they will. Legislative Democrats wanted permanent (and large) tax increases levied on tobacco during the session. Once got, will they give back in the next session? Pfft. Go smoke something else, please.

What about tourism? Frankly, I don’t understand why tourists are targeted like they are. One lame argument: Tourists clutter up “our” roads and infrastructure and therefore should pay, pay, pay for it.

Are you kidding me? Yes, sometimes traffic goes a bit slow while Chicago Charlie gets his bearings, but if Charlie is here for two whole weeks — that’s 14 user days. Kalispell Klem? He’s out there 365 days a year! Who really uses “our Montana infrastructure?” We do.

Who should pay? We should, but don’t. The bypass is taxpayer money robbed from 300 million other people. Yet some locals are freaking out at Kalispell legislator Frank Garner for supporting an increase in the only kind of tax that is even remotely fair to users and non-users alike, the state gas tax. Pure hypocrisy, period, even if Mr. Garner got a lot of help from tax-addicted Democrats on this.

My bottom line is, I don’t support a special session and any expected rush job that haphazardly adds new, overtly punitive taxes. The scary fact is, Montana faces long-term trends out there in the natural-resource sectors and our new, footloose world that will require careful and sustained application of brainpower, not lazy quick fixes.

Finally, I’m OK if state government gets a tiny taste of Montana’s real world realities, of the long-term economic impacts already being felt by those private businesses and citizens who pay the taxes that finance state government.

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