SARAH COOKE Associated Press Writer
HELENA Lawmakers get their first look Tuesday at what could be a defining issue of the 2007 Legislature: tax relief. First up is a high-profile proposal by Gov. Brian Schweitzer. Unveiled last summer as part of the governor’s so-called “Square Deal” initiative, his $100 million plan would give Montana homeowners one-time, $400 rebates on their 2006 property taxes later this year. All eligible homeowners would receive the same check, regardless of house cost or size, under Schweitzer’s plan, which purposefully excludes wealthy nonresident homeowners and large corporations, said Sen. Dan Harrington, D-Butte, the bill’s Senate sponsor. “This tax break will stay in Montana and give the people of Montana a little more money to deal with,” he said. Republicans counter that their competing proposal, which could be introduced in the House as early as this week, is better because it calls for an ongoing, across-the-board tax cut. The GOP’s three-part plan would cut statewide property tax bills, make up the lost school funding from other state revenue and give an income tax credit of up to $400 to resident homeowners. The average discount would also total about $400, although businesses and large corporations would get a lot more money. “We have the superior plan,” Senate Minority Leader Corey Stapleton, Rbillings, said. He and other Republicans say their proposed tax cut is permanent even though, if passed now, it could be revoked by the next Legislature. Schweitzer said it’s wrong for the GOP to tout their plan as permanent because one Legislature cannot legally bind the next, and lawmakers often make changes down the road. “Any of these proposals are not permanent,” he said. The governor said the next Legislature can come in and offer another tax rebate like the one he’s offering this time, just as they could vote to roll back the GOP tax cut if passed.
GOP leaders say it’s not fair for the governor to exclude businesses and others from tax relief. But Harrington said wealthy Montanans have benefited from other tax breaks in recent years, and large corporations like BNSF Railway Co. Won’t spend the rebate in Montana like resident taxpayers will. “Those tax cuts go back to (companies’) corporate offices,” he said. Harrington said he also thinks the state has reached a point where “it no longer can continue to pass tax breaks that become permanent,” citing budget shortfalls faced by lawmakers just a few years ago. “How long until the next downturn are we going to be right back to where we were a few years ago?” he said. Republicans have countered that the state’s former budget woes were part of a national downturn, and that more stable, sustainable tax revenue is now flowing in courtesy of energy development. The bill is Senate Bill 139.