Montana Public Radio

Capitol Talk: Tax Cuts, Pay Raises And A Republican Reversal

Jan 29, 2021

Gov. Gianforte's State of the State address was a mixture of Republican canon and bipartisan proposals. Lawmakers disagree whether an immigration bill has racist intent. A handful of Republicans change their minds about a bill to limit gender-affirming health care for transgender youth. And hefty raises for executive branch department heads raise some eyebrows.

Listen now on Capitol Talk with Sally Mauk, Rob Saldin and Holly Michels.

Sally Mauk Rob, Gov. Greg Gianforte gave his first ever State of the State address this week and he basically recited the Republican canon: Montana will thrive if we cut taxes and cut regulations. We've heard this before.

Rob Saldin Yeah, we sure have. I mean, there were some bipartisan moments, too, I thought. You know, he mentioned starting teacher pay, missing and murdered indigenous people, math - those were all kind of across-the-board applause lines. But yeah, certainly taxes and regulations were a big part of the emphasis.

You know, on taxes Gianforte emphasized the need to cut income taxes, making the case that he was also making throughout the campaign, that we're un-competitive with other Rocky Mountain states. You know, he noted that we have the second highest income tax among those states, which is accurate.

And then he makes this point that, well, there are real costs with having our income tax that high, that we lose good paying jobs and tax revenue that those jobs generate because employers and employees decide to go elsewhere.

You know, maybe so. But the glaring omission that stood out to me here is that all those other states he's trying to compare Montana to, those states have a sales tax, and we don't, right? And that's a critical piece of information right?

So like take Idaho, for example, which I don't think anyone would characterize Idaho as some kind of socialist utopia. Well, they have an income tax that's basically identical to ours and, on top of that, they have a 6% sales tax.

So you've got to generate this revenue from somewhere, and if you don't want a sales tax, which apparently we've decided that we don't, well that means you're going to be relying on income and property taxes.

Mauk I was a little surprised that he took some shots at the previous administration, especially over its handling of the pandemic, and he said he would seek to dismiss a lawsuit the state had brought against some Flathead businesses that didn't follow pandemic restrictions. And here's what he had to say about that:

Gov. Greg Gianforte "A pandemic with severe economic fallout is bad enough. We don't need government piling on as well."

Mauk And Rob, that line got very loud applause from the Republican side of the aisle.

Saldin Yeah, it did. You know I think the political reality here is a Gianforte does have to draw some distinctions and at least make it look like he's pursuing a little bit of a different path from his Democratic predecessor. And that's, I guess, the main way in which he made that point.

But you know, I guess I also took note that Gianforte walked into the chamber wearing a mask, which was notable given how politicized that's become.

I also got a kick out of one moment that was another one of these big bipartisan applause lines. Gianforte said, and I wrote this down, he says, "I look forward, and I know many of you do as well, to the day when we can take off our masks and throw them in the trash and go about our lives in a safe manner."

The funny thing is, is that it appeared as though that day had already come and gone long ago for most of the Republican legislators in the chamber who are not wearing masks despite the tight quarters.

Nonetheless, and again, apparently ignoring the fact that most of his fellow Republicans had already taken off their masks and thrown them in the trash, Gianforte went on to say that he was going to keep wearing a mask and that you should, too.

And that, I thought, was notable. It was responsible leadership. We should of course expect that from our leaders. But the reality is, is that there are governors that you can point to out there who have been very irresponsible about the pandemic, and there's political pressure around this stuff and all the rest.

So I thought that was notable that Gianforte would, you know, cut against the partisan grain a little bit on that.

Mauk The governor also promised to sign some anti-abortion bills and Holly, Livingston Rep. Laurie Bishop gave the Democratic rebuttal to the governor's speech and she went after Republicans for going after women's rights. Here's what she said:

"After a long campaign season talking about jobs, Montana Republicans have let our economic recovery fall by the wayside. Instead, they have focused their energies on attacking the freedoms of Montana's women and children."

Mauk And her rebuttal, Holly, focused on legislative action more than anything the governor said.

Holly Michels And what really stood out is she delivered this message that Democrats have really focused in on over the last week and a half. And that's what we just heard her saying, that it's Democrats who are really focusing on doing the work of trying to boost the state's economy right now and reduce taxes, not Republicans.

The Democrats have really honed that message as we've seen Republicans moving through bills these last couple of weeks that are pretty contentious bills that would limit access to abortion, or target transgender athletes and minors.

The argument Democrats are making — and Bishop made in that response last night — is that Republicans ran on all these economic issues but Democrats are the ones, she's saying, that are doing the work this session. But obviously, we just heard Rob talk about Republicans have a far different view of those abortion bills, and Gianforte got rounds of applause for saying he'd sign them last night.

I think we also heard from Bishop, a lot of Democratic priorities we're familiar with, like protecting unions, working on access to public lands, things like preserving Medicaid expansion. Bishop said the party would work to protect those gains they made over the last few sessions with Democratic governors.

Her speech, also like Gianforte's, dealt with COVID — both health and economic issues — and then tried to draw a contrast between Democrats' plans to respond to those things. She talked about how Democrats' tax plan is, they're arguing, targets way more on the middle class and lower classes directly.

And I think the last thing that stood out to me was even while Bishop was being pretty sharply critical of Republicans, she also said the Democrats are excited to work across the aisle on things where they could, like school funding and teacher pay, which I think is an acknowledgment that they're in the minority so to get anything passed, they'll need at least some Republican votes.

Mauk Rob, opponents to a bill that would ban local governments from enacting "sanctuary city" laws were cut off from testifying by the chairman of the House Judiciary Committee this week, Billings Rep. Barry Usher, when those opponents tried to argue the bill is rooted in racism.

And it should be noted Montana does not have any sanctuary cities. The bill's supporters argue this is immigration legislation that has nothing to do with race, even though the only immigrants they seem worried about have brown, not white, skin.

Saldin Well, yeah, that does seem to be the case. You know, there is a good faith objection to sanctuary cities, and that is that they are in conflict with and are undermining national immigration laws.

So, you know, one way you can look at this is through the lens of this enduring struggle in the United States over federalism. And by that, I just mean that it's one of those issues that arises when you have a system like ours in which we've got multiple power centers, right? Washington, D.C., the states, counties, municipalities.

You know, another key point that you mentioned Sally, is that Montana doesn't have any sanctuary cities. Now, I suppose it's possible that Missoula or Helena or Bozeman might try to move in that direction, but I'm not aware of any pushes to do so, at least none that are very serious.

But this effort on the part of Republicans in Montana to crack down on sanctuary cities isn't really a response to a perceived problem here in Montana so much as it is a part of a national effort, right? This isn't just a Montana thing, we're seeing this stuff come up across the country. And, of course, the former president emphasized it from the moment he hit the national stage some five years ago.

Now, all that said, I don't think it was very good look for the Republicans in that hearing this week to shut down people who are trying to talk about race in the context of this, because there are some pretty clear connections there. But just as a general matter, I don't think it looks very good to be silencing people testifying before a committee. The optics on that are bad.

You know, you can just let the people say what they want to say. You're always free to ignore it after the fact, but telling them they can't talk just doesn't look good. And of course, there is also a little bit of a hypocrisy issue in that particular hearing, because they didn't shut down some other people who were on their side of the issue, but who, you know, also waded into some similarly objectionable territory.

Mauk Holly, one of the surprises of the session so far is the defeat of a bill that would have barred doctors from providing gender-affirming care to transgender minors. That bill passed second reading, but failed on a final vote when a handful of Republicans switched their vote.

Michels Yes. So like you said, that second reading, it was a 53-47 vote, which is a pretty close margin. And it's not entirely uncommon for that margin to change a bit on third readings, which is the vote that would either send a bill through the House and onward or would defeat it. So there's always this potential, and especially on such a controversial bill.

We saw five Republicans who moved from a yes to a no over the course of the day. And then there was one who moved from a no to yes. So the bill ended up going down on a 49-51 vote.

One day later, Rep. John Fuller, the Whitefish Republican who's carrying the bill, brought a motion to reconsider and that also went down on an even bigger margin, 46-53. So it's fairly likely that bill is dead now.

Mauk St. Regis Republican Denley Loge is one of those who changed his mind on the bill. Here's what he said:

"I got thinking about it and then the doctors, there are some things they need to do and this wouldn't have allowed them, even just simple things."

Mauk And my guess is, Holly, is that he and other legislators hadn't thought much about this issue at all until this bill.

Michels I talked with Rep. Sue Vinton who's a Billings Republican and majority leader in the House about why she moved from a yes to a no. And she said it's something that she's really been learning about this session and had been thinking about for weeks.

And she sort of characterized it as not this 24-hour change, but something that was a pretty long process for her to work through. She said that she was contacted by a lot of Montanans who shared their stories and their family stories, and that's part of what swayed her.

And we did see a pretty big coalition form in opposition to this bill and they had pretty significant outreach to legislators. Like we heard from Loge, it sounds like he was learning more about the bill through the process and in the end, just wasn't comfortable with what it did about keeping people from accessing health care.

I think something interesting that Vinton told me is that this legislation is pretty new to the Legislature, that they haven't seen policy proposals specifically like this before. So it is, like you said, something they're all just learning more about as they go through the process.

Mauk The defeat of this bill shows the power of lobbying and educating legislators about an issue they may know very little about.

Rob, after campaigning on cutting state spending, Gov. Gianforte this week gave all of his agency heads big raises. In some cases, 40% raises, tens of thousands of dollars. That's the opposite of cutting spending.

Saldin I think a lot of people perceive it that way, for sure. I wasn't particularly scandalized by that. You know yes, in a way it doesn't look good because he's talked so much about the horrors of big government and budgetary restraint. And now here he is giving these huge raises to his agency heads. So the optics on that aren't great.

But the other side of the coin here is that if you want to attract top people for these positions, and we should all want that, you've got to pay them. Travis Hall, the governor's comms guy, put out a ton of comparative data over Twitter this week on this topic, and the key takeaway is that while these are obviously sizable increases in big salaries by Montanans standards — there's no way around that — but they're still well below average nationally. And even if you look at it in comparison to the other Rocky Mountain states, which are similarly situated to us, we're still on the low end.

Mauk The argument, Rob, that Montana's pay isn't competitive is true, but it's not true just for agency heads, it's true for many other state positions that aren't getting big raises, I think might be one of the issues that people who raise their eyebrows about this might make.

Saldin This is a recurring issue in the public sector in Montana. There are some positions like these in which there's this national market at work. And relative to that, national market salaries in Montana are low. However, there's also the in-state market. And if you're looking at things from a purely Montana perspective, you know, yes, these salaries appear to be — in fact more than appear to be — they just are very generous.

And I think from the perspective of, say, a public employee who's teaching K-12 school or something, you look at these huge raises and I suspect that those kind of rank-and-file teachers in the classroom and most other state employees aren't going to be getting 30% and 40% increases.

Mauk Well it's hard to believe, but the first month of the Legislature is almost over. Where's the time gone?

Holly and Rob, thanks and we'll talk to you next week.

Saldin Thanks Sally.

Michels Thanks Sally.

Capitol Talk is MTPR's weekly legislative news and analysis program. MTPR's Sally Mauk is joined by Lee Newspapers State Bureau Chief Holly Michels and UM Political Science Professor and Mansfield Center Fellow Rob Saldin. Tune during the legislative session Fridays at 6:44 p.m., via podcast, or listen online.