If this week’s newsletter had a theme, we’d be calling it Money Week. Yes, we talk about money a lot here and in the Capitol, but this week is special because we are talking! about! taxes! There has maybe never been anyone as hyped to write about revenue streams as I am right now, but that’s because of the never-ending supply of money-related gifs available to me.
No, not that tax season. (Actually, yes, also that tax season. But I’m not here to remind you to do your taxes, I’m not your mom.) This is leg session tax season, meaning legislators have started to debate the best ways to bring in revenue to our somewhat cash-strapped state. There’s already one very bad proposal out there to eliminate property tax altogether and instead implement a state-wide sales tax of 2.5 percent.
A quick lesson: some taxes are progressive, meaning the amount of a person’s income or wealth taken for taxes increases the more income or wealth that person has. But some taxes are regressive, meaning that tax takes a larger portion of a person’s income or wealth the less they have. (There are also flat taxes, which affect everyone equally.)
A sales tax is a regressive tax. “Why?” You may ask. “Doesn’t a sales tax inherently tax everyone the same amount?” Yes, but a 2.5 percent tax on a pack of toilet paper or a winter coat is a larger portion of a poor person’s budget than a rich person’s. It hits the lowest-income folks the hardest, because there’s not really an option in our society where you can just stop buying toilet paper. (Well, I guess you could at your own sanitation risk.)
Our friends at Montana Budget and Policy Center study all this complicated stuff for a living and are a million times smarter than me about it. You can read their detailed report on how a sales tax would hurt Montanans here.
They also have a lot of proposals for ways to bring money into Montana’s government without hurting rural and low-income Montanans, like closing corporate tax loopholes and restoring the top tax rate on the wealthiest one percent of people in the state.
The Flip Side of the Coin
Last year, Montana’s revenue fell short of predictions, and this caused some pretty massive cuts to essential government services in a special legislative session. Some of those cuts were later restored, but it was still gnarly. The government needs money to run, but the very first challenge in budgeting comes from predicting how much money the state will actually bring in in the next two years. The Governor’s office and the Legislative Fiscal Branch came up with different predictions this year.
Basically, if we want the state to stop cutting services, we need more tax revenue. But we need those taxes to be focused on out-of-state corporations and the top percentage of income-earners, not low-income folks. Conservatives generally disagree with this strategy, so it probably surprises nobody that the House passed a bill that will make it harder for the legislature to pass new taxes in the future by raising the vote threshold to a ⅔ majority. This bill will be heard in the Senate Taxation Committee on Feb. 14, so you have plenty of time to send a message to the committee that a government needs the ability to raise revenue to fund the essential services Montanans need every day. You can call the Capitol switchboard at (406)444-4800 and leave a message for all the committee members.
Do It for the Children
NOW we get to talk about spending money, which everybody knows is much more fun than trying to make it. Governor Bullock has proposed $22 million for public preschools and another $8 million to continue the STARS grant program, which funds Head Start and other programs. HB 225, currently in the House Education Committee, would make this funding a reality. Republicans will have their own, much more school choice-y version of preschool funding later on in the session, but HB 225 would empower the schools that already serve our communities and have accountability systems in place to offer preschool. If this is important to you, the House Education Committee are the folks to contact.
Landlords and Tenants
According to the National Low Income Housing Coalition, ⅓ of Montana households are renters. And if you’ve ever been a renter, you know how easy it is to get screwed over by your landlord on security deposits — especially if you’re a first-time renter, like many students, and don’t know to document damage to the home when you move in.
Rep. Emma Kerr-Carpenter introduced a bill that will require landlords who are found in court to have wrongfully withheld a security deposit to pay back double the amount of the deposit to the tenant. Without this requirement, landlords don’t have a lot to disincentivize them from withholding security deposits, because even if they’re found to be doing it illegally, the worst-case scenario is that they have to give the money back. Even though it often doesn’t feel like it, the security deposit is money that belongs to the renter, and landlords have to prove if the renter doesn’t deserve to get it back.
HB 380 had its first hearing on Friday (check out our Instagram story from Rep. Kerr-Carpenter from the hearing!) Contact the House Judiciary Committee and tell them tenant’s rights are Montanans’ rights.
Villain of the Week
All this talk about rentals leads us to my favorite segment (alternative title: Who’s Trying to Screw You Over?). This week we’ve got Sen. Roger Webb from Billings in the spotlight. Sen. Webb had a bill, SB 184, that would allow landlords to send a tenant’s debt to a collection agency — therefore wrecking their credit and potentially their life — even if the landlord hasn’t proven to a judge that the debt is owed. Not awesome. Luckily, the bill was tabled in committee.
So who is this Webb fellow who has an interest in rental law? I’m so glad you asked. HE’S A LANDLORD. Last session he and Rep. Peggy Webb “collectively carried 15 bills to modify tenant-landlord laws or other state provisions that would have affected their business,” according to this Lee state bureau story on conflicts of interest from 2017.
It boggles the mind that a senator is allowed to continually bring bills that would harm tenants and benefit his own business interests.
Add It to Your Calendar
A Few Quick Updates
SB 152, which we talked about last week and would repeal the sunset on the 6-Mill Levy for higher ed funding, passed out of committee on a 8-4 vote! It should hit the Senate floor soon, so it’s a great time to call your senator and show support.
Last week I wasn’t totally clear on the status of Rep. Ed Buttrey’s bill to take Medicaid coverage away from people who don’t meet work requirements — the bill is still in draft form, and we’ll let you know as soon as the bill is introduced.
See you next Sunday!
Margaret Grayson is Forward Montana’s Legislative Communications Fellow. A recent graduate of University of Montana, Margaret spent three years with the Montana Kaimin as a reporter and editor and interned at the Missoula Independent (RIP). Now she writes jokes for the internet and works to educate young folks about the legislative session.