During a discussion with the Mountain States Policy Center Tuesday, Gov. Greg Gianforte touted the cuts to the state’s income tax rate that he’s championed.
Gianforte will be governor for one more session next year. He says he wants to pass a flat income rate.
“The real advantage of a flat tax is once you get there, it’s very hard for future Legislatures to raise it, because they have to raise the tax on everybody," Gianforte said.
His proposal would set one rate for all income-tax payers. Legislative fiscal analysts project it would reduce state revenue by about $100 million annually.
The state has enjoyed budget surpluses in recent years, which lawmakers have cited to support income tax cuts. The state’s bank account ballooned with federal pandemic aid funds and a growing population contributing to income tax revenue.
But a few factors are now slowing that revenue growth. In-migration is plateauing. Montana has an aging population, which means there’s a greater share of retirees paying less in taxes. And Congress passed the One Big Beautiful Bill, which changed a few tax provisions that are expected to reduce state revenue by about $114 million annually.
Fiscal analysts told lawmakers that based on current spending and revenue projections, the state’s budget could be in the red by 2029. The budget will be up for debate in 2027.
