Income Tax Increase Proposals Stall; Gas Tax Increase Revving

Date: February 26, 2017

Unknown state budget picture causing lowest number of bill introductions in 16 years

NFIB/Montana State Director Riley Johnson’s report from Helena for the legislative week ending February 24

As the 2017 Montana Legislature approaches its midway point next week, the focus remains just as it was on January 2 when lawmakers gaveled in the 65th session—the budget.

Because legislators have not agreed on how much revenue is coming into state coffers, the other general policy bills are very slow in coming out. As Senate President Scott Sales (R) of Bozeman said the first week of the session: “If you don’t know how much money you have coming in, you don’t know how much money you can spend.”

March 1 will be the 45th day of the session, which means all general (policy) bills must have had cleared one house and resting in the second house. Otherwise, they are dead.

This is not the fate of revenue or appropriation bills. That deadline is March 30. So, this past week has been a flurry of general bills going from one house to the other, with many of them being tabled in committee or being killed on the floor of the House or Senate. Bills to start new programs or expand existing programs have been few and far between.

Legislators have introduced 981 bills so far this session, which is the lowest number since 2001.

By February 25, Gov. Steve Bullock had signed 50 bills with 23 measure still sitting on his desk awaiting his decision. He has, to date, vetoed only two bills. There are still 322 bills in play in the House, with 182 that are Senate bills. In the Senate, there are 238 bills, and 156 of those are House bills, meaning they have already cleared that chamber.

This doesn’t mean that there will not be any more bills coming. Revenue and budget bills, like tax increases or decreases, and infrastructure bills can still see the light of day until March 30.

Thus, the true work for the lawmakers is coming after the five-day transmittal break that begins March 1. When the legislators return from the transmittal break on March 7, the feathers will fly as the governor’s office and the Legislature fine tune the budget for the next two years.

State Income Tax

Of interest to NFIB/Montana this week was the hearing on House Bill 452. This was the second bill that increased the individual income tax rates on high earners. The first measure, House Bill 330, was tabled last week in committee.

HB 452 would increase the current top tax rate of 6.9 percent to 7.4 percent on income over $300,000 and to 7.9 percent over $500,000. This bill was tabled this week in House Tax Committee.

Gas Tax

The bill that garnered the most attention all week was House Bill 473. This is the proposal to raise the gasoline tax 8 cents per gallon. Currently, the Montana tax is 27 cents on gasoline and 27.25 cents on diesel fuel. Both taxes would rise to 35 cents under HB 473. The last gas tax increase was made in 1993.

In a prolonged February 22 meeting that went from 3 p.m. until after 7 p.m. before the House Transportation Committee, more than 50 people lined up to testify in favor of HB 473, including a dozen cities and counties, contractors, chambers of commerce, the governor’s office, and a diverse group called the Montana Infrastructure Coalition, which has been drafting this bill for more than a year to address the decreasing funding for roads, bridges, and highway safety.

In his sponsorship introduction of HB 473, Rep. Frank Garner noted that Montana is third in the nation in highway fatalities per capita, with more than 200 deaths each year. There are 900 bridges in the state that have been declared either structurally damaged or totally unsafe for travel. He said 30 percent of all roads in the state need repair and that it was costing Montanans millions each year for repairs to automobiles and trucks from the damaged highways.

All the new money raised by the gas tax would be earmarked only for maintaining and rebuilding roads, bridges, highways, and for safety, such as the Montana Highway Patrol. Cities and counties would receive $24 million for local roads and repairs in addition to the $16.4 that currently flows to local governments from the existing gas tax. Some $2.7 million would go to cover shortfalls in the Highway Patrol, and the rest dedicated to matching federal highway dollars and to state highways.

In a year of austerity, with declining tax income from natural resources like oil, gas, and coal, can a new tax that would raise more than $60 million pass the Legislature?

Many lawmakers are saying yes. Even some that have never voted for a tax bill in their legislative service are saying the need is there. The neglect is obvious, and it is time to tackle the long-range issue of deteriorating highways that are so vital to a rural state like Montana.

Only three people opposed the bill: one individual, the Montana Policy Institute, and Rep. Carl Glimm (R) of Kila.

HB 473 is now a work in progress as legislators burn the late-night oil, fine tuning and amending the proposal.

Seasonal Work

House Bill 496, which would exempt certain seasonal, recreational employees from state minimum wage and overtime rules passed the House on a 57-43 vote. It will now have a final third reading February 27. NFIB/Montana supported HB 496.

Religious Exemption

Another bill NFIB/Montana has been following is Senate Bill 298. This would allow any religious organization and individuals to be exempt from workers’ compensation coverage. It is aimed at a large Amish group near Lewistown doing work on or off the colony. The Amish would be exempt because they do not accept any insurance or benefits from any programs. The issue is over whether any other groups in Montana would also become exempt. NFIB/Montana opposed this bill.

Get Involved

Getting involved in the 2017 Legislature is easy. The best way to have your voice heard quickly is to phone 406-444-4800. Operators are on hand in the Capitol Building to take messages for up to five legislators on each call, and delivery is within a half an hour.

More information on:

  • locating legislators
  • getting an e-mail address
  • viewing committee meetings and floor sessions on television or over the internet
  • review all hearings
  • reading of the actual bills …

… can go to and access everything electronically.

Previous Legislative Reports

February 17 Report—Slowest Session in 16 Years Has Not Slowed NFIB

February 10 Report—NFIB Helps Defeat Costly Workers’ Compensation Proposal

February 3 Report—Skirmish Over Funding Montana Legislature

January 27 Report—Montana Legislature Ponders Tax Credits for Startups

January 20 Report—NFIB Helps Defeat Montana Minimum-Wage Bill

January 13 Report—NFIB Readies Opposition to Montana Minimum-Wage Bill

January 6 Report—Montana Legislature Opens Biennial Session

[Tile photo of Rep. Frank Garner courtesy of The Montana Legislature]

Related Content: Small Business News | Montana | Taxes

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