Senate Democrats pitch tax plan
HELENA - Democratic efforts to tax ''big box'' stores and soft drinks, both tagged as alternatives to taking money out of the coal tax trust fund, stumbled Wednesday on close votes on the Senate floor.
Opponents argued both bills tried to solve the state's $232 million budget deficit by targeting just a small number of retailers or a small number of consumers.
One plan, Senate Bill 332,
proposes a gross-receipts tax aimed at large discount warehouse stores. Retail sales of more than $20 million would be taxed at 1 percent, more than $30 million at 1.5 percent and more than $40 million at 2 percent.
The bill would protect small retailers from aggressive tactics employed by large warehouse stores like Wal-Mart and Costco, said sponsor Sen. Ken Toole, D-Helena.
''This bill protects main street Montana,'' he said. ''We are seeing a dramatic shift in retail in Montana.''
The bill, which would have raised about $33 million a year, fell on a 26-24 vote.
Toole said targeting the so-called ''big-box'' stores makes sense because they use state services, pay low wages to Montanans and ship most of the profits out of the state.
''I make no apologies that this is targeting large, out-of-state corporations,'' he said.
But opponents argued the tax would simply be passed onto Montanans
shopping at the stores, and argued that the stores are successful for a reason.
''The consumer always wins when there is competition,'' said Sen. Mike Sprague, R-Billings.
The other bill, Senate Bill 433, would have set a 5 cent tax on soft drinks and directed that the $19 million raised be spent mostly on senior services.
Sponsored by Sen. Don Ryan, D-Great Falls, the measure stalled on a 25-25 vote.
''I bring this forward because the seniors of Montana are afraid,'' he said. ''They want help. They want to make sure they can live with dignity.''
He said Montana's Medicaid program and services for senior citizens are in drastic need of money after budget cuts made so far by the GOP-led Legislature.
But opponents said the tax could amount to about $1 on a case of $4 pop, a 25 percent sales tax that they said would be paid by the young people who drink soda pop.
''What we have here is the kids vs. the senior citizens,'' said. Sen. Mike Taylor, R-Proctor.
And others argued if the senior groups got their way with the soda pop tax, soon other special interest groups would be lining up with special tax ideas to save their programs.
The stalemate left some wondering if any budget compromise can make its way out of the Senate.
Senate Democrats have already panned the GOP's proposal to increase cigarette and other taxes along with an income tax break. And House Democrats killed Gov. Judy Martz' plan to take $93 million out of the coal tax trust fund.
''If we're just going to say 'our way or the highway,' it won't get done,'' said Sen. John Cobb, R-Augusta.
With fewer than 30 days left in the legislative session, lawmakers have not been able to find enough money to meet the governor's proposed budget and are well short of what it would take to pay for all current state programs.
''If we want to be able to provide services that folks want provided for them, we have to come up with revenue somewhere,'' said Senate Minority Leader Jon Tester.