Signing tax bill was big disappointment for Martz


HELENA - Gov. Judy Martz was in Billings shortly after the 2003 Legislature had adjourned, and a woman shouted at her.

''We're mad at you, governor, because you raised the taxes on our cigarettes,'' Martz recalled being admonished.

''Talk to your legislator,'' the governor responded.

Despite the retort, the fact she was compelled to sign the tax increase remains one of the biggest disappointments of the Legislature for Martz.

The Republican also counts the failure of a bill outlawing open containers of alcohol in all vehicles and lawmakers' refusal to tap the coal tax trust fund to help balance the budget as unpleasant memories of the session.

But those losses aside, Martz declared herself satisfied with the way she and her administration were treated by the Legislature.

She's particularly proud of getting limited income tax relief passed, no matter that it was a scaled-down version of her proposal.

''For the first time in decades, tax reform has been accomplished in some form, and that gives us a start in probably the direction the state needs to go to attract business and retain business,'' she told The Associated Press in a recent interview.

Democrats and Republicans predictably appraised the first-term governor differently.

Senate President Bob Keenan, R-Bigfork, said Martz ''came out a winner'' because the Legislature was able to erase a $232 million deficit without major tax increases.

Montana Democratic Party Chairman Bob Ream said the governor lacked the leadership to work closely with minority Democrats. ''I don't think it enhanced her image one bit,'' he said of her legislative performance.

But even Senate Minority Leader Jon Tester, D-Big Sandy, gave Martz credit.

''The important things she wanted, she got,'' he said. ''She was so successful because the Republicans control the House and Senate. Ultimately, they followed her leadership.''

Craig Wilson, who heads the political science department at Montana State University-Billings, said Martz's conservative leanings served her well with GOP lawmakers.

''In an ideological sense, Martz's political views are more closely aligned with Republicans in the Legislature than were (her moderate GOP predecessor) Marc Racicot's,'' he said.

Still, Wilson saw no ''political lovefest'' between Martz and the Republicans and believes the majority tried to put distance between themselves and a governor with low popularity among Montanans.

House Speaker Doug Mood, R-Seeley Lake, said there's a natural gulf between the executive and legislative branches, regardless of political persuasion.

''At the very beginning of the session, I was asked if we were going to be the governor's voice in the Legislature,'' he recalled. ''I said no.''

The distance between Martz and GOP legislators merely reflected her statewide perspective versus the lawmakers' attention to the needs and wants of their home districts, Mood said.

By the administration's own scorecard, Martz did well. Fourteen of her major initiatives passed the two houses controlled by her party.

Local voter-approved sales taxes, use of the coal trust, programs to help new teachers pay off student loans and create a new health insurance system for schools, restrictions on teenage drivers, a new way to track school enrollment and the open container law were defeated.

Martz still shakes her head over the death of the open container ban.

''I really think that that's something that was a no-brainer,'' she said. ''I think Montanans don't expect to be able to drive down the road and drink at the same time.

''It's a philosophy of some that that's the Montana way to be able to drink in the car. That is an archaic idea,'' Martz said. ''I say drink in the bar, not in the car.''

On the other hand, she is enthusiastic about cuts made in Montana's income tax rates that will move the state from the dubious position of having the nation's highest stated rate.

Martz believes that will spark economic growth by making Montana more attractive to the wealthy.

But to get that prize, Martz had to sign a bill that also contained a $28 million annual increase in the cigarette tax to help balance the budget and pay for the income tax reduction. That contradicted her earlier vow against such a tax increase.

''I never wanted to tax the cigarette smokers,'' she said. ''It was put in a bill that we needed badly to get economic development on the right track and to get tax reform.''

Martz said the Legislature had boxed her in. Keenan said it was the lawmakers' response to being boxed in by her.

On one hand, she recommended the impossible option of withdrawing money from the coal trust in the face of Democrats' staunch opposition to providing the necessary three-fourths vote, he said. On the other hand, Martz professed she would not approve a tax increase, he added.

In the end, ''she really saved the legislative session when she backed off on the no new taxes thing,'' Keenan said. ''It was her decision and her decision alone. She came off of her tax pledge just enough to help us.''

Martz acknowledged some concern about the state's financial condition over the next two years, but feels confident the budget will withstand that uncertainty and tax collections will improve as expected.

''I think we have our bases covered with the projections we have with the money coming in,'' she said. ''I think we've done the right thing with the amount of money we had and I believe the moneys will be there.''

Editor's note: Bob Anez, a native of Havre, has covered the Montana statehouse and political scene for the AP since 1985.


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