Guest Column

Shaping Budget and Tax Policies

Lawmakers should take steps to ensure all Montanans, their families and our communities have the resources they need, funded by fair and equitable policies to pay for them

By Trudi Schmidt and Dave Wanzenried

We enjoyed the honor of serving in the Montana Legislature. Between us we served 17 sessions. As we watch the current legislative session unfold, we are reminded of the saying, “Those who cannot remember the past are condemned to repeat it.” 

During the 2003 legislative session, the Judy Martz Administration convinced the Legislature to approve massive income tax cuts to go along with deep cuts in healthcare and education programs.

The argument for the tax cuts, most of which benefited higher-income individuals, was that they would grow Montana’s economy and cost the state a mere $26 million. Neither turned out to be accurate. According to a study by the Montana Budget and Policy Center, in 2005 alone, the cuts multiplied to more than $100 million. To date, Montana has lost more than $1 billion. 

And, there is little evidence that our economy benefited from these tax breaks for the wealthy. 

Those with modest and low incomes saw little to no benefit from that policy change. To make matters worse, the loss of revenue placed older, frail adults, vulnerable children and those with disabilities at risk. It also forced school boards to choose between raising property taxes or allowing the quality of education and achievement to suffer.

All of this was compounded by still another round of severe cuts approved by the 2017 Legislature. The dramatic loss of revenue forced (1) service providers to close their doors, resulting in countless of lost jobs, (2) the families of children and adults with developmental disabilities into a position of not being able to find basic services for their loved ones, and (3) older adults onto long waiting lists for services so they could remain in their homes.

Finally, the severe cuts in mental health services and basic safety net programs increased pressure on local communities, schools, nonprofit organizations, and public safety to respond to the consequences.

No one could have anticipated what 2020 and COVID-19 would bring – thousands of Montanans losing their jobs – and the strain it would place on our behavioral and mental health systems. But one thing is clear: Montanans need help, and they need it now. 

While we wait for vaccinations to bring about a new, safe ‘normal,’ families need assistance in order to remain in their homes, to put food on the table, to afford child care, and to access healthcare. None of this will be possible with another round of tax cuts. 

The 2021 Legislature has a long list of proposals to extend even more income tax breaks to the wealthy. And guess what? They’re being touted as a way to help kickstart economic recovery and growth.

In order to expand and diversify our economy, we need to invest in our state. Lawmakers should take steps to ensure all Montanans, their families and our communities have the resources they need, funded by fair and equitable policies to pay for them.

As the pandemic subsides, we must avoid making life even harder for the same Montanans who have borne the brunt of decisions made in prior sessions. Instead, lawmakers from both parties must work together to balance the budget, while thinking strategically about the future.

Trudi Schmidt served in the state House and Senate from Great Falls and Dave Wanzenried served the House and Senate from Kalispell and Missoula.

Stay Connected with the Daily Roundup.

Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox.