MBPC Opinion Editorial: It is time to make billionaires pay their fair share

Billings Gazette and Helena Independent Record

A fair economic recovery is possible and affordable. It’s time for billionaires and corporations to chip in.

In Washington, Congress is debating how to help families get back on their feet after a challenging 18 months. However, with so many Montanans still struggling, we cannot afford to return to the way things were. We need to move forward to something better.

While businesses are grappling with the fallout of the global health pandemic and economic downturn, many families know that this crisis has merely laid bare the barriers they have long faced. Rising housing costs and the pressure of balancing caring for family — both young and old — have made it nearly impossible to earn enough to make ends meet. Investments in child care, affordable housing, and home- and community-based services will help people return to work and build a future for their families. They will also foster the workforce that businesses need to get back up and running.

Congress has the opportunity right now to fund these and many other critical investments by ensuring the wealthiest Americans pay their fair share in taxes. Currently, our federal tax system is riddled with loopholes that benefit the wealthiest households and corporations at the expense of investments in the rest of us. Lopsided tax cuts enacted in 2017 made the tax code even more unfair, showering the wealthiest with additional, excessive perks. In 2020, the richest 20 percent of Americans received nearly three-fourths of the tax cuts, costing our country $205 billion. Congress’s plan would make sure the richest 1 percent are paying their fair share.

Making matters worse, the top 1 percent of earners avoid $163 billion in taxes every year. A recent investigation exposed how the country’s wealthiest individuals pay far less than they’re supposed to in federal income taxes. Simply improving tax collections of taxes already due and avoided, mainly by the wealthiest, would add $1.6 trillion in revenue over the next decade.

It is long past time to make a change. Congress should do what’s necessary to ensure billionaires can’t use loopholes and other tactics to avoid paying income taxes on their fortunes.

Congress’s plan would make sure people like Jeff Bezos are paying their fair share. The proposed individual income tax changes would require the richest 1 percent to pay for 97 percent of the tax increase, which will start to address inequities in America’s tax system. And when paired with increases in the child tax credit and the earned income tax credit, these improvements will help families with the lowest incomes – who are often left out of tax reform.

What’s more, a recent study by the Institute on Taxation and Economic Policy found that at least 55 of the nation’s largest companies paid no federal corporate income taxes in 2020. The current plan being discussed by Congress calls for increasing the corporate income tax rate for companies with over $5 million in annual profits and lowering the rate for small corporations with income below $400,000. The proposal also helps level the playing field so small businesses can compete by limiting the amount of taxes avoided by multinational corporations that shift income overseas.

Corporations and the wealthiest have been getting a special deal for too long. Congress should reduce our tax code’s inequities. Most importantly, it should make the investments needed to ensure everyone is included in our economic recovery. Congress has a historic opportunity to close offshore tax haven loopholes, make billionaires pay their fair share, and go after tax cheats. And with new investments in child care, education, and housing, we can make sure all Montanans can thrive.+1 

Rose Bender is Deputy Director of Research and a Senior Fiscal Policy Analyst with the Montana Budget & Policy Center – a nonprofit organization focused on research and advancement of public policies that help families living on low incomes.

Montana’s Recovery Depends on Child Care. Relief Funding Can Make it Affordable and Accessible.

Today, Montana KIDS COUNT released a report detailing data on child care availability, quality, and affordability, “Child Care is Critical to a Modern Economy. Montana Has the Opportunity to Make It Affordable and Accessible.” This report finds that Montana families across the state struggle to find and pay for child care. At the same time, child care businesses operate on narrow margins and often must sacrifice worker pay.

“We know that most parents need child care to keep working, but availability is difficult to find. For every three kids under 6, there is only one licensed slot available,” said Xanna Burg, KIDS COUNT Coordinator with the Montana Budget & Policy Center. “Part of the low supply is because child care businesses struggle to stay open and offer good wages to workers. Providers do not have many options though, as parents already cannot afford child care costs.”

Highlights from the report findings for Montana include:

  • The current licensed child care supply provides one slot for every three children under age 6.
  • Six counties do not have even one licensed child care business.
  • Child care often costs more than in-state tuition at UM or MSU.
  • Child care workers earn $22,900 per year if working full time, barely hovering above the minimum wage.

“Child care is essential as Montana reopens because businesses need workers that have a safe and reliable place for their children during the day. Investing in child care is a win for children, families, and businesses,” said Stephanie Morton, Program Manager with Healthy Mothers, Healthy Babies. “When child care works, our state can get back to work.”

Montana received more than $200 million in federal relief money to support child care. Montana KIDS COUNT provides ten recommendations for utilizing these funds to build a better child care system for children, parents, and businesses that can help now and in the future. The portion of federal money set aside for child care businesses should focus on areas with significant shortage including rural areas, care for infants and toddlers, and providers with non-traditional hours. Capacity grants to encourage new child care businesses can help bolster supply while additional support for Head Start is a ready-built solution to reach more children in Montana.

Montana KIDS COUNT also created an interactive visualization to explore available data on child care in our state. County-level data on access, quality, and affordability can be found at montanakidscount.org/child-care-in-montana

About Montana KIDS COUNT

Montana KIDS COUNT is a leading resource for data on child and family well-being in the state and is dedicated to providing current, relevant, and reliable data to shape the issues affecting Montana children and families. More information can be found at montanakidscount.org/. Montana KIDS COUNT is a project of the Montana Budget & Policy Center, a nonprofit, nonpartisan organization providing in-depth research and analysis on budget, tax, and economic issues. More information can be found at www.montanabudget.org.

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HB 632 – ARPA Funding

The link below is a short summary of House Bill 632 that appropriates $2.1 billion in federal American Rescue Plan Act (ARPA) funds. Appropriations made in HB 632 are authorized to continue through the biennium starting July 1, 2023. This summary is as of April 13, 2021 as passed by the Senate Finance and Claims Committee.

Summary of HB 632 as passed and signed into law.

Ending Pandemic Unemployment Early Won’t Fix Barriers to Finding Work

On May 4th, Governor Gianforte announced he would end temporary pandemic unemployment assistance. This includes the $300 a week in federal Pandemic Emergency Unemployment Compensation (PEUC) benefits and Pandemic Unemployment Assistance (PUA) benefits for self-employed people, underemployed, independent contractors, and those who cannot work due to health or COVID-19 related reasons. These expanded benefits are slated to end September 6th, but Montana will be the first state to end them early. According to the National Employment Law Project (NELP), approximately 25,000 Montanans could face the loss of these critical benefits used to support their families.

Instead, the governor proposed a one-time $1,200 “return to work” bonus, which someone would receive after being hired and employed for four weeks. The program is capped at 12,500 individuals and is on a first-come, first-serve basis. The governor argues Montana’s unemployment rate is back at pre-pandemic levels, and this bonus will encourage individuals to return to the labor market. 

But the governor’s carrot-and-stick plan to end pandemic unemployment benefits, and pay workers a one-time “bonus” after they retain employment for a month, is severely misguided and fails to address the root of the worker shortage problem. 

The governor’s plan will disproportionately harm those who already face barriers to accessing work. The COVID-19 pandemic disproportionately impacted American Indian communities, who already faced barriers to employment. The pervasive legacy of racist policies, coupled with current-day discrimination in education and employment, result in American Indians facing much higher unemployment rates. 

Social and economic barriers, including a lack of state investment in tribal colleges, lack of broadband internet availability, and fewer job opportunities, have resulted in unemployment rates on reservations up to four times the statewide average. Because unemployment insurance is typically reported statewide, the governor’s early end to pandemic benefits is another instance of depriving tribal nations and indigenous people an opportunity to access critical resources. 

The world isn’t the same as it was 15 months ago. Workers, especially those in retail or food service, face a new variety of challenges – the risk of infection, enforcing mask and social distancing mandates, school and childcare closures, as well as quarantine orders. 

Even without these new (and significant) reasons, people may be reluctant to reenter a challenging and potentially unsafe work environment because the structural impediments to finding a suitable job that existed before the pandemic remain. Multiple studies have shown that the enhanced benefits did not discourage people from reentering the workforce. But for many workers, a lack of affordable housing and child care makes regular employment simply unworkable.

The current child care supply only provides one slot for every two children under age 6 with working parents. A lack of affordable housing across the state can also make it difficult for businesses to fill open jobs. A single parent raising two children and earning Montana minimum wage would need to work 78 hours a week to afford a modest 2-bedroom rental home at fair market rent ($878). 

A one-time $1,200 benefit will not cover more than one or two months of rent or a few weeks of childcare. After the benefit runs dry, Montana workers will be left facing the same challenges that had forced them out of the workforce in the first place. 

The Return-to-Work Bonus Initiative will cost Montana $15 million in federal American Relief Plan Act (ARPA) funds. These funds could have been used to address the root of the problems keeping people out of the workforce, like expanding affordable housing options, increasing childcare availability, or providing job training or education opportunities. 

Instead, Montana will turn down $150 million in federal funds between July and September according The Century Foundation and put 25,000 thousand people at risk of losing their expanded benefits. These benefits will no longer be spent at Montana businesses and help boost the state’s economy. But most importantly, they will no longer help those who are unable to find suitable employment make ends meet.

Request For Proposals: Strategic Planning Services

The Montana Budget & Policy Center (MBPC) is looking for consulting services to facilitate and support the organization’s board and staff retreat focused on developing a three-year strategic plan. A core focus of that plan will be to deepen MBPC’s work and commitment to racial equity. A PDF of the full RFP can be found here.

MBPC is a nonprofit organization created in 2008 to provide in-depth research and analysis on budget, tax, and economic issues. Our mission is to advance responsible tax, budget, and economic policies through credible research and analysis in order to promote opportunity and fairness for all Montanans.

We advocate for policies to ensure that everyone can share in the state’s prosperity. We produce reports and policy recommendations on a range of issues that create a fair opportunity for everyone to work, learn, and improve their lives.

Timeline

We will begin reviewing submissions on May 15 and hope to finalize a contract by June 1. Over the summer, the facilitator will work with MBPC leadership to design the format and objectives for a board and staff retreat, scheduled for September 29-30, 2021, in Missoula. It is the preference to have the facilitator in person if public safety allows. Post retreat, the facilitator will compile information gathered at the retreat and work with MPBC leadership and staff to develop a concise strategic plan with the goal of that process completed by November 2021. MBPC staff will have board approve the written plan at its December board meeting. We look to have the facilitator work with MBPC until consensus is reached.

Organizational Context

  • MBPC has a team of 10 with relatively stable grant funding to maintain this level of capacity.
  • MBPC staff and board had a retreat in 2020 focused on racial and ethnicity equity and inclusion (REEI) and have committed to further relationship-building (with each other and staff) and centering REEI in both internal and external organizational work. However, the pursuit of racial equity is a journey, and members of staff and the board are at a variety of places in their learning.   
  • MBPC will have three new board members in summer 2021, bringing our board to eight, of which a majority will be Black, Indigenous, or people of color (BIPOC).
  • In 2011, MBPC established a focus on State-Tribal Policy to promote sound fiscal and budget policy that serves to reverse the history of economic injustice that denies many Montanans who are American Indian access to opportunity.

Purpose of Board and Staff retreat

MBPC looks to use the two-day retreat to develop a three-year strategic plan that will center equity. Topics to address may include:

  • Discuss and potentially revise MBPC’s mission statement.
  • Examine MBPC’s role in regard to pursuing anti-racist public policy. What is our work now? Where are the gaps? What can we do differently? How are we applying our strengths in relationship with marginalized communities? What has worked, and what can we do to affect more equitable policies? What is MBPC’s long-term vision for the role it should play in Montana? What does it mean to be a good partner? What is the board’s role advancing MBPC’s equity lens?

Goals of Strategic Planning

  • Develop a concise strategic plan and organizational goals for the next three years that may incorporate the following areas.
    • Internal Organizational Policies and Procedures
      • Develop systems to create an inclusive work environment.
      • Discuss concrete steps for board and staff to continue to deepen internal racial equity learning and to learning about other oppressive systems/structures.
      • Prioritize REEI lens in professional development, budget development, hiring strategies, staff growth, internal organizational policies, and fundraising.
    • Programmatic and Policy Objectives and Growth
      • Discuss how changed state landscape impacts MBPC’s work moving forward, how we define success, and how we center equity despite that change.
      • Identify future programmatic work in research, communications, and policy development that centers equity. Discuss MBPC’s current process and possible changes in identifying research, communications, and policy priorities.
      • Discuss how to utilize MBPC’s organization reputation to influence more equitable public policy. 
    • Partnerships
      • Identify current and future partnership opportunities.
      • Set goals related to what partnerships look like, including the development of policy priorities, regranting, and financial support.
      • Examine how/when to shift policies based off partner or community input.
    • Organizational Stability
      • Explore the gaps in MBPC’s structure, leadership, and staff capacity.
      • Set achievable goals regarding financial capacity.
      • Review board makeup, participation, and goals for board recruitment into the future.
    • Board Engagement
      • Set goals related to the board’s engagement with and support of MBPC’s equity work.
      • Analyze the board’s role in executing the above areas, including programmatic objectives, partnerships, internal organizational policies, and organizational stability.
      • Identify other areas of more specific board engagement.

Content of Proposal

Proposals should be submitted to Heather O’Loughlin at holoughlin@montanabudget.org and include the following information.

  • Description of consultant’s experience with and approach to centering equity and inclusion throughout the process and deliverables.
  • Consultant’s approach to strategic planning with an explanation of how the process is inclusive.
  • Proposed scope of services and timeline.
  • Proposed tools, strategies, or methodologies used in a retreat setting.
  • Description of strategies or tools proposed to engage board and staff members of varying backgrounds, skills, and experience with MBPC, and varying levels of racial equity learning.
  • Description of deliverables
  • Qualifications and relevant experience
  • Cost estimates
  • Two references
  • Potential travel costs

Position Announcement: State-Tribal Policy Analyst

The Montana Budget & Policy Center (MBPC) seeks a full-time State-Tribal Policy Analyst to support our efforts to advance a policy agenda that works for tribal communities, primarily by performing research and analysis of state budget and policy decisions and conducting outreach to stakeholders in tribal communities.

The ideal candidate (they) will be self-directed, detail-oriented, solutions-oriented, proactive, and curious. They excel at researching, writing, and building relationships and are committed to advancing indigenous justice, tribal sovereignty, and access to opportunity for tribal communities in Montana.

About MBPC

Founded in 2008, MBPC’s mission is to advance responsible tax, budget, and economic policies through credible research and analysis to promote opportunity and fairness for all Montanans.

Since 2011, MBPC has dedicated a focus of its efforts to advancing state budget decisions and policies that honor tribal sovereignty, invest in tribal communities, and promote equity and opportunity for Montanans who are American Indian. We aim to inform policymakers on how state tax and budget choices can strengthen our state by strengthening Indian Country. MBPC works to align our policy and research agendas with community priorities by building relationships with tribal leaders, advocates, organizations, and partners.

Duties and Responsibilities

The State-Tribal Policy Analyst will report to the Deputy Director, Equity Policy and Programs. Specific responsibilities may include, but are not limited to:

  • Research and analyze state budget decisions and policies that impact tribal communities and translate findings into digestible reports and materials for various stakeholders to use. Share research through occasional presentations.
  • Build and maintain relationships with stakeholders, including, but not limited to, tribal leaders, tribal health leaders, MBPC’s State-Tribal Advisory Council, and various coalitions. Meet with stakeholders in person when it is safe and appropriate.
  • Track legislation during the legislative session and keep relevant stakeholders updated on the status of identified legislation, provide testimony on bills relevant to MBPC’s State-Tribal Policy work, and provide members of the American Indian Caucus of the Montana Legislature with general support.
  • Play an active role in MBPC’s efforts to advance racial equity and dismantle white supremacy across various facets of the organization’s work. Examples of how this may look include 1) incorporating historical context, disaggregated data, and community priorities in research reports and 2) participating in organizational learning opportunities.
  • Represent MBPC on coalitions. Participate in conversations and networks across the state to share, learn, and advance a policy agenda that works for tribal communities.

Qualifications

To be successful in this job, the candidate will possess the following skills and qualifications:

  • At least two years of relevant higher education experience and at least two years of relevant work experience. A bachelor’s degree in a relevant field may substitute.
  • A commitment to social justice, racial equity, and tribal sovereignty.
  • A desire to develop a policy and research agenda that reflects tribal community priorities within a state policy context.
  • Experience working with indigenous communities and organizations.
  • Strong written and oral communication skills, with the ability to translate complex topics for various audiences and synthesize data and research into clear, compelling arguments.
  • Capacity to build and maintain relationships with various constituents, including tribal leaders, advocates, and legislators.
  • An eagerness to develop or deepen an understanding of state budget decisions and tax and economic policies and how they have disparate impacts.
  • Knowledge of how state policies impact tribal communities.
  • Comfort working both independently and collaboratively.
  • A willingness to ask clarifying questions and learn from feedback.
  • A proactive, solutions-oriented approach to work.
  • Ability to prioritize, multi-task, and work at a high capacity to meet deadlines.
  • Proficiency in Microsoft Office programs and with internet research.
  • Ability and openness to travel within Montana roughly 10 percent of the time. Additional travel to Helena may be necessary during the legislative session.

The following qualifications are a plus:

  • An advanced degree.
  • Knowledge of federal Indian law and policy.
  • Experience working for or with advocates, legislatures, or government entities.
  • Quantitative analysis skills, including experience using Excel and analyzing data.
  • Experience with state fiscal policy.

Position Details

The ideal candidate will work full-time from Helena or Missoula, although location is flexible while we remain teleworking due to the pandemic. MBPC will consider candidates based elsewhere in Montana. A PDF version of the job description is here.

The starting salary range for this position begins at $50,000, with exact salary depending on experience. MBPC also provides competitive benefits packages within the nonprofit sector, including health, retirement, and leave benefits.

To Apply

To apply, submit a resume and one-page cover letter to Preston Parish (he/him/his) at pparish@montanabudget.org. Submit your application in PDF or Word document format as one file named with your first and last name (for example: Preston_Parish.pdf). Please make the subject of your email “Application for State-Tribal Policy Analyst.”

The position is open until filled. Application review will begin on May 17.

MBPC is an equal opportunity employer and does not discriminate on the basis of race, creed, color, sex, national origin, marital status, sexual orientation, gender identity, religious or political affiliation, disability, and any other classification considered discriminatory under applicable law.

Senate Bill 214 Has Deep Roots in Settler Colonialism

After tabling it on April 1, House Tax voted on April 9 to pass Senate Bill (SB) 214 out of committee. Now, it will move to the House floor for the full House of Representatives to consider. Like SB 138, its predecessor, SB 214 has deep roots in anti-indigenous policy. Opponents to this bill have made that clear. At the bill’s March 24 hearing, 20 opponents, including tribal leaders, testified in opposition, while just two proponents spoke in favor of the bill. Lawmakers should keep this in mind when casting their vote.

SB 214 relies on policy from 1887, when Congress passed the General Allotment Act, also known as the Dawes Act, with the ultimate purpose of dissolving tribal governments and reservations and assimilating American Indians into non-Indian society. This forced allotment of reservations opened tribal land to property taxation and made SB 214 possible today.

What Is Senate Bill 214?

SB 214 would change an existing five-year tribal property tax exemption for fee-to-trust transfers that the 2011 Legislature created with bipartisan support when it passed SB 412. The proposed changes under SB 214 would allow counties to recapture taxes on exempt property if either the five-year period expires (meaning the process with the federal government takes longer than five years) or if the federal government denies the fee-to-trust transfer.

In February, Senate Tax tabled SB 138, which would have outright repealed the temporary exemption. In 2019, the Legislature opposed two similar bills: House Bill (HB) 401 and HB 733. Lawmakers’ first decision to table SB 214 was the right one.

How Is Senate Bill 214 Connected to Allotment?

SB 214 is possible because of allotment. When Congress began the allotment and assimilation era in 1887, it divided communally held reservation lands into individual parcels without tribal consent, allocated parcels to tribal citizens and households, and sold “surplus” parcels to non-Indian settlers, most often without compensating tribal nations. In total, the U.S. government took more than 90 million acres (roughly the size of present-day Montana) from tribal nations.

Now, reservation lands are a patchwork pattern of ownership and land status types, with land generally falling into one of two status types: trust or fee. Trust land is held in trust by the federal government and includes land collectively owned by a tribal nation and allotments to tribal citizens. Trust land is exempt from property taxes. Fee land, on the other hand,is generally private property and can be owned by American Indians and non-Indians. Because of the forced allotment of reservation lands, state and local taxing jurisdictions may assess property taxes on tribally owned fee land.

As intended, allotment had devastating consequences for tribal communities. In 1934, Congress ended the allotment era when it passed the Indian Reorganization Act (IRA). Under the IRA, tribal nations and the federal government can return fee land to trust status. However, the process can be lengthy and costly to tribal nations. To facilitate those transfers and to recognize that one government did not want to tax another while the wheels of the federal government turn slowly, the 2011 Legislature passed SB 412.

By attempting to change this exemption, SB 214 ultimately would punish tribal nations for the federal government moving too slowly. Because proposed changes would allow counties to collect back taxes, SB 214 could also incentivize counties to delay fee-to-trust transfers by challenging those applications.

A Better Path Forward

Rather than impose property taxes on tribally owned reservation land, the Legislature should dismantle the legacy of allotment by expanding the tribal property tax exemption. This would be consistent with the treatment of other government-owned property in Montana, where property that is owned by federal, state, and local governments is tax-exempt. SB 214 targets land owned by tribal governments, disregarding and dishonoring the government-to-government relationship and political status of tribal nations as sovereign.

Expanding the exemption would also be consistent with the approach that other states take. Oregon, for example, exempts tribal lands from property taxes when a fee-to-trust application is pending. There are no time constraints. Idaho exempts tribally owned reservation land altogether, in an effort to treat all government properties the same, whether federal, state, county, or tribal.

What Is Next?

Although it was recognized as bad policy long ago, tribal nations continue to feel the impacts of allotment today. MBPC opposes SB 214 and will continue to track its progress.

In the meantime, tell your Representative to oppose this bill by sending them a message at https://leg.mt.gov/web-messaging/ or by calling 406-444-4800.

For a deeper dive into the land status of Indian Country, see MBPC’s report, Policy Basics: Land Status of Indian Country.

The Kansas Tax Cut Experiment Won’t Work in Montana

Tax policy rarely becomes famous. But when Kansas cut income taxes severely in 2012 and 2013, the state’s tax experiment became so well-known it is now synonymous with failed tax cut policy. The experiment failed so badly that the legislature voted to overturn the tax cuts just six years later.

Yet, the Montana legislature is trying to lead us down the same yellow-brick road. Governor Gianforte’s tax cut proposals vary somewhat from the Kansas approach. However, they are similar in the significant reduction of state revenue, and what we know from the Kansas experiment is deep cuts to state revenue do not lead to economic growth.

In 2012 and 2013, the Kansas legislature cut the top income bracket by nearly 30 percent, from 6.45 to 4.6 percent. The plan also cut the tax rate for certain businesses down to zero. The legislature hoped that the plan would lure businesses in with their low-tax rate and spur economic growth. Ultimately, the opposite happened.

While the rest of the country began to recover from the Great Recession, Kansas lagged behind. Over the five years after implementing its tax cuts, Kansas’ 4.2 percent private-sector growth was lower than all of its neighboring states (except for Oklahoma), while jobs in the United States as a whole grew by 9.4 percent. Additionally, Kansas’ economy lagged behind its six region states and the rest of the country as a whole.

Governor Brownback predicted such robust economic growth that his tax-cut proposal would be nearly revenue-neutral to sell the tax cuts. Unsurprisingly, lower taxes only led to lower revenue. Five years into Kansas’ failed tax experiment, the gap between the state’s revenue and expenses was almost a billion dollars

As Kansas hemorrhaged revenue, the state ultimately had to take an ax to the state budget. Between 2014 to 2017, the state enacted nine rounds of budget cuts to deal with its lost revenue.

Kansas slashed funding for roads, bridges, and highway maintenance. It cut K-12 education so profoundly that the Kansas Supreme Court ruled that its education funding failed to comply with its Constitution. Local communities lost vital services like public safety, local health departments, and public libraries. Kansas’s credit was downgraded three times, and it increased sales tax twice.

Like Montana, Kansas is a primarily rural state. The dramatic drop in state aid to local government hit Kansas’ rural communities the hardest. As a result of the tax cuts, 77 Kansas counties had to pick up the tab to make up for state aid loss by increasing their local tax levies. Of those, 80 percent were rural or frontier counties where services are already more expensive to deliver due to their remoteness and lower populations.

Behind the curtain, there was no magic. Tax cuts led to budget cuts, and Kansans suffered.

Despite this recent real-world example of state tax cuts’ failure, Montana seems determined to follow the same path. The Montana legislature is currently considering a slate of tax cut bills that will put Montana at risk of falling behind the rest of the country as we recover from our pandemic crisis. These tax cuts will primarily go to the wealthiest Montanans, exacerbate racial inequalities, and make our tax code even more regressive. For a more in-depth analysis of this and the other tax cut bills in the Montana legislature this session, see our report: What Proposed Tax Cuts Really Mean for Montanans.

A recent concerning development is SB 399 – a massive overhaul of Montana’s tax system. Usually, a bill of this magnitude would have had lengthy hearings with weeks or months of debate. Instead, this 100-page bill had its first hearing only 12 days ago. This bill would decrease Montana’s top tax rate from 6.9 percent to 6.5 percent, would immediately eliminate 17 tax credits without any review or analysis, and could cost the state nearly $40 million a year in lost revenue by 2025. It would also increase taxes on one in five Montana taxpayers, including about 36,000 with incomes below $60,000. This significant revenue loss amounts to children missing out on necessary services, road repairs going unaddressed, and forgoing opportunities to rebuild and recover from the COVID-19 pandemic.

Montana is trying to recreate Kansas’s failed tax cut experiment and hoping for a different outcome. In this session, our legislature should be focused on rebuilding our state, not cutting our resources.

House Bill 397 Would Increase the Supply of Housing Montanans Can Afford

The Senate Taxation Committee will take executive action this Friday on HB 397, the Montana Workforce Housing Tax Credit. Montana’s workforce housing shortage is one of the most critical issues impacting urban and rural areas across the state. Rent in Montana has grown 62 percent faster than the national average, and 668 percent of Montana renters living on very low incomes pay more than half of their income for housing. This system is simply unsustainable. This program is a much-needed tool to increase Montana’s housing supply as part of the state’s post-COVID come-back plan.

HB 397 incentivizes developers to build more homes for working families. The Montana Workforce Housing Tax Credit is a companion program to the federal Low-Income Housing Tax Credit (LIHTC) and, when paired together, would double the use of these federal funds. About 20 states have state-based housing tax credit programs to address their workforce housing issues. For example, after Colorado renewed its state housing tax credit in 2015, the program helped double the number of new and renovated homes affordable to working families, created 19,000 jobs, and generated $1.5 billion in total economic benefit. Montana’s state housing tax credit looks to deliver similar results in the number of homes created, as well as the financial and economic benefits generated by tax credit supported housing projects.  

HB 397 would create:

  • More workforce housing: Passing a state-based housing tax credit would allow Montana to double (or possibly triple) the number of rental homes that we can create or preserve each year.
  • More investment: A state credit could bring in enough private investment to produce 18,000 homes and generate over $828 million in economic activity over ten years.
  • More workforce housing in rural areas: Since 2016, $310 million for 1,900 apartments in federal tax credit requests were denied due to lack of available credits, with more than half of unfunded projects located in rural areas. A state tax credit can support larger urban developments, making more federal tax credits available for rural areas and small towns.
  • More good-paying jobs: A single new housing construction project supports 13 jobs earning $600,000 in labor incomes per $1 million invested in new multi-family housing construction projects. Additionally, more available workforce housing allows employers to hire and retain the employees they need to grow their business.

Everyone deserves a home, but homes are also critical to ensuring a stable and productive workforce. Our state continues to suffer the social and economic consequences when people cannot find affordable and quality housing in the communities where they work. Our legislature must act urgently to address this problem by passing the Montana Workforce Housing Tax Credit program.

House Bill 632: Summary of ARPA Funds

The link below is a short summary of House Bill 632 that appropriate $2.1 billion in federal American Rescue Plan Act (ARPA) funds. Appropriations made in HB 632 are authorized to continue through the biennium starting July 1, 2023. This summary is as of April 1, 2021 as passed by the House of Representatives.

 HB 632: Summary of ARPA Funding