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The Session Week 5: The judiciary, tax rebates and the budget surplus

Mara Silvers Today is legislative day 26 out of 90. And this week, we're talking about changes to the judicial branch, the budget surplus and tax proposals. This is The Session, a look at the politics and policy inside the Montana statehouse. I'm Mara Silvers with Montana Free Press.

Shaylee Ragar I'm Shaylee Ragar with Montana Public Radio.

Eric Dietrich I'm Eric Dietrich with the Montana Free Press.

Arren Kimbel-Sannit And I'm Arren Kimbel-Sannit with Montana Free Press.

Mara Silvers We're going to get into the budget stuff here in a second. But let's start with the judiciary. Arran, and you've been tracking a couple of Republican bills that would have a big impact on that branch, including how judges can decide to block laws from taking effect and how judges are investigated for misconduct. So, is it fair to connect these bills to the political fight between Republicans and the judiciary that folks might remember from last session?

Arren Kimbel-Sannit Yeah, I think that is fair. So, just for a quick primer, there were more than two dozen bills passed by the Republican majority Legislature in 2021 that were subject to litigation. The majority of those were halted or struck down by the courts in some form or fashion. As a corollary to that, as Republicans have expanded their control in the Legislature, won every statewide election in Montana from the governor's office on down. The court system is sort of the last vestige of Montana institutional power where Republicans don't really have the end all, be all say over how things go.

Mara Silvers So, one of the bills you're watching is Senate Bill 191, sponsored by Republican Senator Steve Fitzpatrick from Great Falls. What exactly would that bill do?

Arren Kimbel-Sannit [Senate Bill] 191 from Fitzpatrick, who is himself an attorney, pertains to temporary restraining orders and injunctions. And basically, these are just court orders that preserve the status quo in a legal action. They stop something from happening either on a more permanent basis or a temporary basis. These are also the tools by which judges stop the implementation of legislation. And that's the kind of political nexus here. Basically, SB-191 would seek to change the standard under which courts can issue these injunctions and restraining orders.

If you look back, there was this litigation over abortion restrictions passed in 2021 in Planned Parenthood vs. State, that's the court case. And there was an issue of, you know, whether a district court judge would block the implementation of some of these laws. And in a legal filing, attorneys with the Montana Department of Justice, which was representing the Legislature, made the argument that in the past, Montana courts have made it too easy for people to obtain injunctions and restraining orders. And they argued using very similar language as is present in Fitzpatrick's bill, that the court should adopt the federal standard.

In a filing of its own, the Court basically said that Republicans in the Attorney General's office are overstating the stringency of the federal standard and understating the stringency of the state standard, and that in most cases, federal and district courts rule on these things in pretty similar fashions.

Mara Silvers And we saw that bill passed out of the Senate this last week. Another bill that you're watching is more about how judges are investigated for alleged misconduct. That's House Bill 326. What exactly would that do to the Judicial Standards Commission, which currently oversees those proceedings?

Arren Kimbel-Sannit Yeah, so, the JSC is the five-person body that reviews complaints of judicial misconduct and then refers them on to the Montana Supreme Court if they determine that they're valid. And this bill from Representative Kerri Seekins-Crowe, who is a Billings Republican, would give the Montana attorney general — who in this case is himself a Republican — as well as the speaker of the House of Representatives — who is also a Republican — more authority to name people to this commission. And, you know, in the eyes of Seekins-Crowe, this is about avoiding a situation in which "it is the fox guarding the hen house. It is judges judging judges."

Arren Kimbel-Sannit But in the eyes of the people who represent the Court and lawyers, like lobbyists for the state bar and the Montana Judges Association, what this is really doing is injecting partisanship, specifically Republican partisanship, in a supposedly nonpolitical body that is designed to hear pretty specific complaints about issues of personal misconduct with judges, not just hear complaints from people who are unhappy with how the courts ruled on, for example, a piece of legislation that was subject to litigation.

Mara Silvers Well, we'll have to keep an eye on that one as it moves forward.

Montana political leaders want some answers about a Chinese spy balloon floating in the Big Sky. Senator Steve Daines is moving up the party leadership ladder. The Republican plan for allocating a billion dollars is headed to the Senate. And prominent Montanans lead a rally to support the state Constitution

In other parts of the State Capitol, lawmakers are focused on completely different subject matters, including budget negotiations. Eric, one of the defining questions that you've been digging into is what to do with the state's $2.5 billion surplus. So how are lawmakers going about answering that question?

Eric Dietrich Yeah, so the first thing we should note is that surplus is big. $2.5 billion is about $2,200 per Montana resident. And you really have three options for what to do with it. Either you try to spend it on something you hope was worthwhile, you stashed away in a rainy day fund or you give it back to taxpayers.

Mara Silvers So what are lawmakers saying that give back approach could look like?

Eric Dietrich So, it sounds like that's what lawmakers are actually going to do with a big chunk of the money. They've announced a six-bill package that would take about $1 billion of the surplus and put most of it into rebates. That passed the House last week and is now off to the Senate. There are a few different things in there, but the big things are income tax and property tax rebates.

Mara Silvers Okay. Help us drill down into those proposals.

Eric Dietrich On the income tax side, they've set aside $480 million. That's enough to give back up to $1,250 per person. On the property tax side, they've set aside $284 million. That's enough to give a rebate of up to $1,000 per homeowner. The rest of the billion goes to other things, paying off some state debt and also taking out some money and creating a pot for a highway infrastructure fund.

Roughly $1 billion dollars in spending passed an initial vote in the Montana House of Representatives Wednesday, largely along party lines. The Republican package would provide for tax rebates, pay down the state’s debt and outline cash for infrastructure projects.

Mara Silvers So most of those proposals passed on party lines, right?

Eric Dietrich Yeah, the Democrats like the highway fund idea, but really, not the other pieces. They voted against those on the House floor this week. House Minority Leader Kim Abbott of Helena said her caucus generally felt like the whole package, maybe there are some good ideas in there, but she wanted to slow down.

"This is too fast. It's irresponsible. This is reckless spending. This whole package that we've tied together is reckless spending," Abbott said.

Eric Dietrich The argument from Abbott and other Democrats is that most of the state's big budget bills traditionally passed late in the legislative session. That gives more time for budget people to look at numbers and compile information about how much tax revenue the state has collected, and gives you a better picture about what the budget's going to look like going forward. So you can make, in theory, better decisions about how much money you'd have to spend right now.

Democrats are also concerned about the property tax rebate piece of that going to homeowners, but skipping renters. So in the current form, those rebates would go only to people who own homes, which of course misses a lot of people in Montana. They brought an amendment on the House floor last week that would have tried to change that, but it also went down on party line votes.

Mara Silvers And what are Republicans saying about this rebate package? What do they like about it?

Eric Dietrich Republicans, including the governor, have been talking a lot about how the rebates will help Montanans who've seen their family budgets squeezed by inflation in the last couple of years. Here's Representative Bill Mercer from Billings.

"Given the inflation that our taxpayers have faced, this is a very responsible thing to do. They paid in the money. They deserve to get the money back."

Mara Silvers So, these debates can sound pretty theoretical when they're happening at the Capitol, but they definitely have real impact on real people. Shaylee, you've been doing some reporting recently to figure out how these budget proposals square with Montanans' lives. Tell us about what you found out.

Shaylee Ragar Like Eric said, we know that Montanans are feeling challenges brought on by the pandemic, inflation and other factors, and they're feeling a strain on resources like housing and child care.

According to a review from the Missouri Economic Research and Information Center, Montana ranked 18th in the United States for cost of living, so that's higher than about two thirds of other states in the country. And lawmakers who support the property and income tax rebates say they want to help mitigate some of that cost. I talked with a working mom in Missoula who said she absolutely knows how she would use this money, but it likely won't make any big groundbreaking changes in her day to day life.

Sitting on a $2.5 billion surplus, Montana Republicans this week advanced a first round of their plan for tax cuts. That included part of the governor’s agenda, which he says was built for Montana families. Montana Public Radio’s Shaylee Ragar spoke with one Montana family about how the policies could impact their lives.

Mara Silvers What's happening in her budget that makes her say that?

Shaylee Ragar So this mom Shea Kumaewa and her husband have a one-year-old daughter, Asa. She owns a cleaning business in town. Her husband works in construction, and it's hard sometimes to make ends meet.

"I've got my bootstraps, I'm pulling them up and, you know, life is still pretty hard," Kumaewa said.

Shaylee Ragar So Shea's family would not benefit from a property tax rebate because they rent, like a lot of working families in Missoula. She did say she would absolutely use that income tax rebate from the state, which could be up to $1,250, and that could go towards child care for Asa, her daughter.

She has been taking Asa to work, but that's becoming more impossible as Asa is learning to walk and she's getting into things. I think a lot of parents can relate to that, given how much childcare costs, that income tax rebate would pay for a month, maybe a month and a half of childcare. And Shea says she would use that time having Asa in full-time care to find new clients for her business, try to increase her income, and then maybe she'd be able to afford full-time care when the rebate runs out.

"It could be helpful for a lot of families, and I wouldn't want to discount that, but I just wonder if there would be a more impactful way to actually create sustainable change in the wealth gap," she said.

Shaylee Ragar Shea noted that for this income tax rebate to make a real difference, she'd need to be able to afford and find childcare, which is by no means a guarantee. I think Shea's story parallels how policymakers, including the governor, are pitching these proposals to spend the surplus: which is that it's one-time-only money for one-time-only proposals with one-time-only impacts.

Mara Silvers So where do these proposals go next?

Shaylee Ragar The proposals will go over to the State Senate next. And I want to make clear that the Senate can make changes to these. They could increase the rebates, they could decrease the rebates. They could change who is eligible for them. So we'll definitely be watching that. And we'll also be watching to see if some of the other governor's tax proposals, like a cut to income taxes and the creation of a child tax credit, advance in the Legislature.

Mara Silvers Thanks so much to you, Shaylee and Eric and Arren for joining us this week.

Eric Dietrich Glad to be here.

Arren Kimbel-Sannit Thanks.

Shaylee Ragar See you next week.

This has been The Session, a preview of the policy and politics inside the Montana State House. The Session is produced by Montana Free Press, Montana Public Radio and Yellowstone Public Radio. Join us next week for a new episode and subscribe wherever you get your podcasts.

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