2019 Montana Legislature End-of-Session Report

Date: May 03, 2019

In some big victories for small business, NFIB helped stop new taxes, tax increases, and premium rises in workers’ compensation policies

Montana State Director Riley Johnson reports from Helena on the small-business agenda on the April 25 adjournment

Montana’s lawmakers adjourned the 2019 legislative session April 25, and contrary to what they did in 2015 and 2017, closed with some major, albeit contentious, legislation passed:

  • funding for infrastructure
  • a new history museum
  • Medicaid expansion

All these issues were priorities of the Democratic side of the aisle. The Republican side broke into two groups in the final days, giving a majority of votes to the Democrats to pass the measures.

It was a vexing final day. Members of both houses tried to resurrect a number of bills that had not passed legislative votes.

Tax Proposals Stopped

The good news for small business was that the House and Senate Tax committees were able to kill most of the bills that would increase taxes or would have created new taxes. These included a tax on fireworks, carbon taxes, luxury sales taxes, and local-option sales taxes.

NFIB also lobbied to stop bills that would have limited the use of plastic straws in restaurants, prohibited the use of Styrofoam boxes in restaurants, placed a tax on plastic grocery bags, and boosted sales taxes on rental cars.

Also in the tax arena, the Legislature passed a bill that would have increased the deduction of Social Security income, but Gov. Steve Bullock vetoed that bill.

NFIB closely followed 45 bills. It managed to kill 34 bills before they reached the House or Senate for a vote. The remaining 11 bills are up for signing or vetoing by the governor, who has up to 10 days act. And if he doesn’t by then, they automatically become law.

Premium Increases on Workers’ Compensation Policies Blocked

As originally written, House Bill 658, sponsored by Rep. Ed Buttrey (R-Great Falls), called for financing the expansion of the state’s Medicaid program by levying a 2.75% tax on all workers’ compensation insurance written by the Montana State Fund.

This would have raised policy costs on 25,000 businesses currently purchasing their workers’ compensation policies from the State Fund. NFIB lobbied vigorously to have the proposed tax removed from the bill but the House passed HB 658 without that amendment on a 61-37 vote.

NFIB continued it lobbying effort in the Senate, where it had better luck. The Senate sponsor of the bill amended the State Fund tax out it. The Senate then went on to pass the bill 28-21, and the House passed the bill as amended 61-35.

With the State Fund tax removed from the bill, NFIB withdrew its opposition to HB 658. It now sits in the governor’s office for a veto or signature. It is expected to be signed.

This bill affects many NFIB members. More than 18,000 small businesses in Montana have one or more employees on Medicaid expansion funding. Statewide, some 96,000 people have Medicaid expansion insurance.

Third Time a Charm for Infrastructure Funding

Another hotly contested measure was House Bill 553 by Rep. Eric Moore (R) of Miles City. This is the now famous infrastructure bill that boxed up the entire Legislature in 2015 and again in 2017 when it failed passage both times in last-hour deal-making with lawmakers who didn’t favor bonding as a financing mechanism.

HB 553 also was wallowing in the final days of this 66th legislative session, before taking wing and flying through the House on a 95-4 vote and the Senate on a 50-0 vote. It will allow up to $80 million in bonding over time for statewide infrastructure projects on roads, water systems, wastewater systems, schools, and other public buildings. Our state’s cash infrastructure budget calls for spending $273 million in cash, and bonding of $80 million by the state.

State Budget

The final state budget for the biennium was set at $10.3 billion with about $210 million for the surplus to fund emergencies or if tax dollars do not materialize enough to meet expectations.

Until We Meet Again

The 66th session of the Montana State Legislature began on January 7 and ended 87 working days later on April 25. Barring any special sessions being called, as were done in 2017, NFIB will keep busy through the next 18 months monitoring interim session legislative committees, following tax proposals, and rattling doorknobs in the Capitol building. The next session of the full Legislature sits down for business in January 2021.

Previous Reports From the Capitol

 

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