Montana Public Radio

The Session Week 8: Taxes, Public Health And Labor Unions

Feb 22, 2021

As of midday Friday 918 bills had been introduced and Gov. Greg Gianforte had signed three bills into law. This week we’re watching legislation on tax policy, public health and labor unions.

Republican lawmakers are ferrying a number of Gov. Greg Gianforte’s tax proposals through the legislative process, including Senate Bill 159, carried by Sen. Greg Hertz of Polson. It would lower the personal income tax rate for the state’s top tax bracket from the current 6.9% to 6.75%. That would reduce taxes at least some for about half of Montana taxpayers Similarly, House Bill 303 carried by Rep. Joshua Kassmier, a Republican from Hamilton, passed out of the House last week. The Business Investment Grows (BIG) Jobs Act would increase the exemption ceiling on the state’s business equipment tax from $100,000 to $200,000, in effect eliminating the task for about 4,000 businesses.

SB 159 passed out of Senate Taxation Friday and awaits a debate and vote on the Senate Floor. The next procedural step for HB 303 is a public hearing before the Senate Taxation Committee.

One of Gianforte’s measures that didn’t move forward with this package is Senate Bill 181, which adjusts the Montana corporate income tax system in a way that could actually bring the state more tax revenue. Department of Revenue Director Brendan Beatty has said is an essential piece of to fund the governor’s overall proposal.

SB 181, carried by Sen. Hertz, would change how income taxes are calculated for multi-state corporations like BNSF Railway, Walmart and Amazon. Currently, the fraction of a multi-state company’s income considered taxable by the state of Montana is calculated with a formula factoring in how much of a company’s sales occur in-state, as well as the fraction of its payroll that is paid and how much of its property is owned in Montana. The bill would change that to a single-factor formula relying on Montana sales alone.

That could mean the state captures more revenue from digital retailers that have high sales in Montana but don’t employ many people here. The Department of Revenue estimates the change would bring the state about $15 million a year in additional revenue, which is about half the cost of the SB 159 income tax cuts.

The bill has faced opposition from industry groups that believe they would pay more under the proposal. BNSF Railway, for example, testified the bill would increase its taxes by $9 million a year, costs it could pass on to rail shipping customers like grain growers and coal companies.

Senate Bill 181 is awaiting debate on potential amendments and then a vote from the Senate Taxation Committee.

Democrats this week will have a hearing for a separate tax measure they’re presenting as an alternative to the Gianforte plan. House Bill 424 is carried by Rep. Emma Kerr Carpenter of Billings and would add a new income tax bracket for earners over $500,000 in addition to increasing the state’s earned income tax credit, effectively reducing taxes for lower-income working Montanans with children. A fiscal note for the bill is not yet available, but Kerr-Carpenter last week said she thinks the proposal would be a net positive for general fund revenues and only raise taxes on a small number of high-income Montanans.

House Bill 424 is scheduled for a hearing in House Taxation Tuesday at 8 a.m.

House Republicans are beginning to combine similar bills that seek to limit power of public health officials. Rep. Matt Regier, a Republican from Kalispell, sponsored House Bill 230, which would allow the Legislature to affirm, extend, revise or terminate a governor’s executive orders issued during a declared emergency between legislative sessions. Regier also sponsored House Bill 236, which would allow local elected governments, like county commissioners, to have oversight of and object to health orders made by local boards of health. Rep. David Bedey of Hamilton has two similar bills. House Bill 122 would allow lawmakers to poll themselves about executive actions and set a 60-day termination deadline on state disaster declarations. Bedey’s House Bill 121 also seeks to expand elected local government oversight of health board and officer actions. Bedey says there’s not a concrete structure for combining these four bills into two, but debate and negotiating is expected in committee this week.

The four bills are up for committee action in House Business and Labor Monday at 8:30 a.m.

Also this week, Sen. Hertz’s Senate Bill 228 will get its first hearing. The bill would get rid of public union membership termination periods and allow public union members to withdraw with 14 days’ notice. The former member then wouldn’t be allowed to rejoin the union for a year. Hertz says his constituents who are members of public unions have been asking for this and frames it as a workers’ rights issue. Union leaders question if the policy would be legal. Republicans have introduced a number of labor-related bills, including a so-called “right to work” proposal to prohibit private union membership as a job condition, a bill that would prevent public employers from deducting union dues and another proposal that would require public union members to actively renew their membership each year.

Senate Bill 228 is scheduled for a hearing in Senate State Administration Wednesday at 3 p.m.