Montana lawmakers choose tax policy as top study priority
HELENA, Mont. (AP) — Montana lawmakers have chosen a study of state and local tax policy as their top priority during the 18 months before the 2021 legislative session.
The Legislature passed 27 joint resolutions for interim legislative studies and lawmakers were asked to rank them in order of importance. The tax policy review received the highest ranking by far among the 88 lawmakers who returned surveys. Sixty-two legislators did not respond. Legislative staffers say they usually receive 100 to 110 responses.
The tax study resolution, requested by the House Taxation Committee, calls for the Revenue and Transportation Interim Committee to make recommendations about whether to revise the state’s tax structure to better reflect the changing economy and stabilize state revenue while promoting economic prosperity. It also should reflect sound tax policy, including simplicity, efficiency and ease of compliance and administration, the resolution said.
It recommends people outside the Legislature be included and the public should have opportunity to comment.
The tax issue has been building in recent years.
Headwaters Economics, a research firm, suggested the state’s tax structure is not generating revenue in areas where the economy is growing, such as the service sector and investment income. Instead, it relies on declining revenues from oil, gas, mineral and timber production. Commerce also is increasingly taking place online and the state is not levying taxes on sales made by out-of-state companies, officials have noted.
Democrats have unsuccessfully tried to reverse a 2005 tax cut on the wealthiest residents that Democratic Gov. Steve Bullock says has cost the state $2 billion.
Revenue declines led to a special session in 2017 that ended with millions of dollars in budget cuts that led to reductions in services, again bringing calls to update the tax system.
The Legislative Council is scheduled to meet May 29 to assign the studies to various committees.
The Legislative Council and the Legislative Finance Committee are also charged with studying whether lawmakers should meet every year, for a 45-day budget session during even-number years and a 45-day policy session during odd-numbered years. The legislature currently holds 90-day sessions in odd-numbered years.
The utility infrastructure bill asks lawmakers to identify any weaknesses in the electric transmission grid, evaluate any new technologies that might be more efficient and study the system’s ability to withstand threats such as an electromagnetic pulse, terrorism and wildfires.
Lawmakers also prioritized studies on:
— Whether the Water Court, established in 1979 to adjudicate water rights, would be needed after 2028, when its work is expected to be completed
— How the Commerce Department used money raised by a lodging tax over the past five years
— The interaction between the Division of Child and Family Services and law enforcement, the courts and its ombudsman’s office and whether any changes are needed
— Whether 1,036 square miles (2,680 square kilometers) of land designed as state wilderness study areas in the late 1970s should continue to remain in limbo. Congress has not acted on them, which has created use and management conflicts over the past 40 years.
— Why the state health department isn’t using all of its funding for senior citizens and the disabled, despite waiting lists for services. Possibilities include workforce issues and low Medicaid reimbursement rates limiting the number of slots available.