Income tax cut hinging on final state budget numbers
State Director Ronda Wiggers reports from Helena on the small-business agenda for the legislative and political week ending March 12
Only a few bills of interest to NFIB had any movement this week. HB 303 to reduce your business equipment taxes passed second reading on the Senate floor Friday (39-11) and will need to visit the Senate Finance & Claims Committee before its final vote next week. As the signing ceremony is already being scheduled, I assume Gov. Greg Gianforte is pretty comfortable with the final vote count.
The income tax reduction bills were also heard this week. In executive action, the House Tax Committee reduced the income tax rate even further to 6.5% (it is 6.9% – the original bill reduced it to 6.75%). It was discussed at the beginning of the session that the goal was to get to the 6.5% number, but we would need to see final budget numbers prior to moving that much lower. The committee then delayed action on the bill to get a new fiscal note.
The federal stimulus money cannot be used for tax reductions, much of it is directed to schools ($328 million), unemployment funds ($286 million) and backfilling for the costs of administering vaccines and testing ($143 million). There is also an amount greater than our current general fund ($910 million) that must be spent prior to 2023. It is currently understood that we can use this money for economic aid to individuals and businesses, give pay premiums to essential workers, or invest in water, sewer, and broadband infrastructure. There is another $298 million for budget relief to towns, cities, and tribal governments.
Because Montana went into the pandemic with state budget reserves and our current 2022-23 budget was not expecting a fiscal short-fall, our money will likely not go to backfilling short-falls and can instead be used for one-time investments. Budget Director Kurt Alme indicated in the House Appropriation Committee that the governor would like to avoid using the stimulus dollars to set up new programs that will require ongoing funding. There are currently two bills introduced to begin working on the details of appropriating this money.
On Wednesday, the Senate Business Committee heard HB 254 Revising Wrongful Discharge and passed it from committee on Thursday. Among other things, this bill increases the probationary period from 6 months to 12.
The committee also heard HB 198 Increasing the Workers’ Compensation death benefit. It passed the committee unanimously.
The Week Ahead
Tuesday, March 16
- 8 a.m. House Judiciary Committee – SB 361 Generally revise laws to establish certificate of rehabilitation – this bill would allow an individual with a criminal record that has successfully completed all of the terms of their sentence to request from the courts a “certificate of rehab” that they could then use to obtain housing and work. It does not bind an employer to anything, so we are just monitoring.
- 8:30 a.m. House Business and Labor Committee – SB 260 Revise laws related to property interests and transfer of business – this bill includes licenses and intangible property as value in a legal takings proceeding. It would be added protection for any small businesses in a legal takings issue.
Wednesday, March 17
- 8:30 a.m. House Business and Labor Committee – SB 367 Revise labor laws relating to independent contractor certification – Under current law, if someone is found to be working without an IC license, they are automatically assumed to be an employee. This bill would allow for more investigation. If someone were to tell you that they had an IC license, act as an IC and then it is discovered that their license had lapsed, as long as they were truly acting as an IC, it would not be a violation.
- 9 a.m. Senate Business and Labor Committee – HB 378 Create a mini-COBRA law for small employer health insurance plans – this bill does exactly what the title states. The employee is responsible to pay the premium, so we are currently just monitoring.
Thursday, March 18
- 8:30 a.m. House Business and Labor Committee – SB 251 Revise civil liability laws related to damages – this bill limits damages in a lawsuit
Friday, March 19
- 9 a.m. Senate Business and Labor Committee – HB 121 Require elected official approval of local health board and officer actions – this is a compilation of all the different proposals. NFIB is monitoring this legislation.
New Bills NFIB is Monitoring
Previous Reports and Related News
- February 1—Governor Releases ‘Montana Comeback Plan’ – NFIB-backed Liability Protection Bill Advances