In 2003, Montana Senate Bill 407 extended two extremely liberal generosities to the top 1% of Montana income tax payers.
1) A Credit for Capital Gains Tax. Only eight other states allow such an oddball credit to reduce state income tax liability.
2) Cutting the top individual income tax rate from 11 percent to 6.9 percent. And the tax rate for the next to the top bracket? 6.0 %!
Do read the well-footnoted report of how over a decade, SB 407 has reduced Montana tax revenue by about one billion dollars.
http://www.montanabudget.org/wp-content/uploads/2016/04/Revenue-Lost-Report-Final.pdf
Now consider the big cuts coming to Montana state agencies and departments.
From what I have glimpsed, there’s some heavy burdens to bear.
State agencies have to maintain quality service to the public, but to some degree will have to freeze wages and equipment purchases.
Local school districts will have to “backfill” money to replace what the state takes away from public education.
Please read the third and final page of the following link. What do you see? OPI cutting $22 million to local education.
Here’s a link to three pages of starting point, conjectural, heavy burdens resulting from the current Montana budget situation: http://www.montanabudget.org/early_look_2019_budget/
I can’t believe my eyes. $114 million state cuts, triggering $254 million federal expenditures into Montana across two fiscal years?
Don’t freak out at the size of the cuts. The numbers are from Standing Legislative Motions. Look at the ratio of Fed dollars to State dollars for line items you are interested in.
Well, enough talk about the expense side of the current shortfall deficit in the Montana Budget!
How about you? Where, oh, where has there been open discussion about the revenue side of balancing the State Budget of Montana?
What follows deals with income tax revenue. Then personal, commercial and state revenue from shipping Montana crude oil through DAPL.
Well, there was a flash in the pan, last week. I’m old and slow and no wonder I was knocked off guard by quick quiet stealth moving to kill the fair tax bill HB 330.
On February 10, the 20-member Taxation Committee refused to advance HB 330 to a vote of the Montana House of Representatives. HB 330 would have added $12 million in tax dollars to the Montana General Fund ending mid-year 2018, and would add about $50 million in fiscal year 2019.
How so? HB 330 took a half step back to top rate of 11%, by going from present 6.9% to 8.9% top Montana tax rate on individual forms declaring over $400k annual income.
Simple as that. For instance, a Montana taxable individual income of $500k would pay an additional 2% times $100,000, or $2,000.
That’s a comparatively light burden.
Why the dickens protect the liberal tax benefits of SB 407?
Why hand the trump card of fair tax relief to Governor Bullock?
From what I’ve gathered, Governor Bullock is talking about:
• Tax wine, marijuana and the top 1% income.
• Build the rainy day balance back up to $300 million.
• Save millions with K-1 public education.
Speaking of looking at increasing revenue to the State of Montana, here’s something for you and legislators and Governor Bullock to think about. Could and should Montana produced crude oil have fair access to the Dakota Access Pipeline (DAPL) which is, of course, connected directly to the ETCOP Pipeline and then to the biggest tank farm in Nederland, Texas.
Could it be that Montana commerce is restrained away from shipping Montana crude oil to tidewater, seaport Nederland, Texas?
From what I gather, conveying Montana crude to Nederland by DAPL-ETCOP Pipeline would cost about half of transporting Montana crude by railroad cars to Nederland.
I mention this because recently Montana revenues from Montana oil and gas royalties to Montana’s General Fund are about one quarter of what they used to be!
Wake up to opportunity. Of all the Montana counties, the counties bordering the Dakotas are experiencing the lowest wage growth, and the highest percentage of unemployment!
Montana oil and gas production tax split off as revenue to counties fell to $37.9 million in Fiscal Year 2016. It fell from roughly $90 million and $96 million, in 2013, and 2014!
How much Montana crude will ship through DAPL?
Bob Williams
Stevensville