Wonky Word Wednesdays: Centrally Assessed Property Taxes

Have you ever felt like talking about the budget is a bit like taking the vocabulary part of the SATs? There are so many words that we would never use in our day to day lives! I generally know what they mean, but probably could not define them if asked.

With that in mind, we decided to start Wonky Word Wednesdays. Each Wednesday we will pick a word or phrase and do our best to explain what it is in a way that we can all understand. If you have words you want us to explain – in layman’s terms that is – comment below, or post on our Facebook page, and we will add it to our growing list.

The first wonky word (or phrase) will be Centrally Assessed Property Taxes.  At MBPC, we have been closely following Charter Communications proposed ballot initiative. Charter Communications is asking voters to redefine its property so it is no longer centrally assessed, dropping its tax rate from 6% to 3%.  

Centrally Assessed Property began as a way to tax industries – like the railroad – that had property in multiple counties or states and that operated as one big system. The idea was that the company would be taxed uniformly across the state, instead of asking each county to figure out the value of the company’s property located within its boundaries to determine how much in property taxes the company should pay.

The same general rules apply today. A centrally assessed property must operate as a single entity and must be connected across county or state borders, even if that connection is not a physical one – like a telephone wire. The different types of property that Montana law requires to be centrally assessed include: railroads, telephone lines, power lines, natural gas transmission or oil transmission lines, pipelines, airlines, coal mines, etc.

One example of a centrally assessed property is a cell phone company.  It may not have a specific tower in each Montana county, and those towers are not physically connected by a wire. However, a cell phone company is one single company and the ability for the towers to communicate with each other forms the “connection.” This connection is critical for the cell phone company to operate its business across the state. This connection is also what gives the company its value. Therefore, it is centrally assessed in Montana by the Department of Revenue on a statewide basis rather than asking each county to determine how much it should pay in taxes.

Centrally assessed properties are an important part of Montana’s tax code. Hopefully we all understand them a bit better now – I know I do! Check back each Wednesday for more wonky words from your friends at the Montana Budget and Policy Center. And don’t forget to let us know what terms you would like us to explore next!

Medicaid Expansion Would Benefit Indian Country

Medicaid expansion would significantly benefit Indian Country, especially in Montana. 

Did you know that Montana ranks the highest of any state for number of uninsured American Indians? With expansion, nearly 20,000 American Indians would be eligible for enrollment in Medicaid.  Although  many American Indians rely on Indian Health Service (IHS) facilities for care, IHS is an underfunded program that can be best described as “rationed” healthcare.  These facilities are currently funded at about 60 percent of the actual need, resulting in very limited services. Medicaid expansion would greatly improve access to health care for American Indians.

Medicaid expansion will not only ensure that close to 20,000 American Indians have health insurance, but it will also free up funds for IHS facilities to increase the services that are offered, and improve care.  Additionally, Medicaid expansion in Indian Country will not only improve the health status of American Indians, it will also help create jobs and put money into the state’s economy.

Expanding Medicaid is an opportunity to strengthen the lives, families, and communities of Indian Country. For more information on this topic, be sure to check out MBPC’s report of Medicaid expansion in Indian Country.

Montana Can’t Wait for Medicaid Expansion

What do Montana’s stunning parks, good schools, and winding roads have to do with Medicaid expansion?Montana Medicaid Expansion

They are all things our state and local tax dollars support. Last week, we wrote about how Medicaid expansion would help create 12,000 new jobs that will generate $1.3 million in increased labor productivity every day.

But these new jobs would create more than just new employment. They will also produce $135,205 in state and local tax revenue every day – supporting our schools, parks, roads, and helping to offset the small cost of Medicaid expansion for the state.

Montana should accept federal dollars to expand our state’s Medicaid program. Every day that passes, we are asking Montanans to wait.

To wait on better roads, stronger schools, cleaner parks.

To wait on new, good paying jobs.

To wait on a robust economy.

To wait on receiving the health care coverage they need.

 Montana can’t wait any longer. It’s time to expand Medicaid.

Montana’s Missing Out on a Chance to Boost Our Economy

Montana's_jobsLast week, we wrote about the staggering amount of federal money Montana is losing every day we delay Medicaid expansion.

But it doesn’t stop there.

Medicaid expansion would help create and support 12,000 jobs across the state, mostly in the growing health care industry. In a still-recovering economy, these jobs would give Montana a significant economic boost.

What kind of a boost? It is estimated at roughly $1.3 million a day. With more Montanans working in good paying jobs, Medicaid expansion would help generate millions of dollars in increased labor productivity. By accepting federal dollars to expand Medicaid, Montana can help strengthen communities across the state.

But there is more to the story than just dollars and cents. Expanding Medicaid would extend affordable health care coverage to as many as 70,000 Montanans. For those without access to health care, Medicaid is much more than a numbers game.

Expanding Medicaid means good jobs, a stronger economy, and healthier families – just what the doctor ordered.

Montana Loses $1.84 Million Every Day It Waits for Medicaid Expansion

 Montana is stuck in a waiting room.Montana's Fading Opportunity__1

Waiting for much needed revenue. Waiting for health care for thousands of Montanans.

Every day Montana stays in the waiting room, the state loses out on a staggering $1.84 million, a fact sheet released today by the Montana Budget and Policy Center shows.

That’s how much federal money would come into the state every day under expansion. It’s money that not only will pay for health care for as many as 70,000 Montanans, it will support jobs across the state and strengthen our economy.

The clock is ticking and the lost dollars are mounting. This Saturday, April 19, marks the day Montana will have lost out on $200 million in federal investment.

Montana can’t keep waiting. It’s time to move forward with Medicaid expansion. 

Montana’s Tax System: How Do We Stack Up?

StateandlocaltaxesOn Tax Day, we all spend some extra time thinking about how much we pay in taxes. Even more so for low- and middle-income families, who contribute a larger share of their income than high income people do. The difference is significant – Montana low-income families pay 6.4% of their income in taxes, compared to 4.7% of the wealthiest Montanans. 

The Institute on Tax and Economic Policy released a new report that compares the tax structure of each state and examines this issue of who pays.  

How does Montana stack up? There’s good news and bad news.  

First, the good:

  • Montana’s tax system relies primarily on the income tax.
  • Our income tax is progressive. This means as income goes up, the tax rate also goes up.
  • Montana does not have a sales tax. The sales tax is one of the most regressive taxes, with poor families paying eight times more of their incomes in sales taxes than wealthier families.

And now the bad:

  • Low-income families contribute more. Montana’s income tax kicks in at a very low income level. In fact, Montana is one of only a few states that impose income taxes on working families living in poverty. For a two-parent family with two children, Montana income tax rates begin at $12,500, roughly half of the federal poverty line.
  • While Montana’s income tax has graduated rates, the legislature collapsed these rates in 2003. Now, all Montanans making more than $13,900 are taxed at the same rate.  Over half of the benefit of the changes went to families with incomes over $500,000 per year. 
  • Our tax code values wealth over work. Montana taxes capital gains at an even lower rate than income earned by working. This tends to favor wealthy Montanans who make money on investments, compared to those earning an income from wages. Montana is one of only nine states that provides this tax break.
  • Low-income Montanans pay a greater share of their income in property taxes than the wealthy, because in general the property tax rate for residential homes is the same for all homeowners no matter their income. Families in the lowest 20% of income level contribute about 3.5% of income toward property taxes, compared to only 2% of income for the wealthiest Montanans. 

All in all, Montana is in the middle of the pack when compared to other states.  But we could do more to help working low-income families. Twenty-four states have improved the disparity in the share of income going toward taxes by enacting state-based Earned Income Tax Credits, which lowers the taxes paid by working low-income families

As Montana families complete their taxes, policymakers should consider policies like the Earned Income Tax Credit to ensure a prosperous Montana. 

The Case of the Missing Fourteen Cents

Hard-working women across the state of Montana are trying to solve a mystery. From every dollar in every paycheck women are bringing home for a hard day’s work, thirty-three cents are missing.

So the women started looking around.

“Nothing is missing,” Montana working women were told. “You chose to leave it behind – by working in the field you do, by taking the job you did, and by raising a family for those few years. Look again. You’ll find it.” paygapgraphic

So they looked again.

The findings were clear. Women do, in fact, experience a pay gap of $0.33. For every dollar a man makes, a woman makes $0.67.

This week, Governor’s Bullock Equal Pay for Equal Work Task Force delved into this mystery. According to the Montana Department of Labor and Industry, part of this pay gap can be accounted for. Women often choose to take care of children and family members full-time, shortening their time in the labor force. Many women work in traditionally female professions, such as education, that are often underpaid. Women are also more likely to take part-time work, which often does not pay as well as a full-time position.

But these explanations only account for 65.7% of the pay gap (women, on average, are better educated than men, negating 6.7% of the gap). Fourteen cents out of every dollar that Montana women earn is still missing. This unexplained portion of the pay gap points to the gender inequality women in the workforce experience.

These missing cents matter. Economists estimate the U.S. economy would have produced an additional $447.6 billion in income in 2012 if men and women were paid equally. For women supporting families, the pay gap hurts even more. A single mother in Montana earns $26,610. That’s $13,000 less than a single father makes. Not only does the pay gap hurt Montana workers, it hurts families as a whole.

Our entire state does better when everyone earns their fair share. It’s time to find, and return, those missing fourteen cents.

Uncommon Beauty, Unparalleled Opportunity

Montana is a great place to live, work, and play. Visitors from every corner of the planet come to explore our rivers, mountain valleys, and world class skiing. How can Montana transform these eco-tourists into place-loving residents?

On Friday, March 21st, I was honored to join the Montana Ambassadors on a panel to address this question and more at their annual conference in beautiful Big Sky, Montana. The Ambassadors include business leaders, government officials, and community partners in their effort to promote and protect what we most love about the Big Sky state.

Here’s my theory: Montana’s unbelievable public lands attract new business and are the underpinning of Montana’s strong economy. Our public lands, rivers, and lakes shape and define us.

As it turns out, I’m not alone in this public land love. These ideas are deeply ingrained in Montanans. publiclands

Here’s a typical summer scene from my childhood. Can you identify with this scenario?

Picture a lanky 9 year-old-girl wearing third generation, hand-me-down jeans and an old ball cap trying to keep up with her dad on a rocky mountain trail. Keeping up was no easy task, considering Dad was a 6’2 timber-worker. Together, father and daughter searched weekly for another unexplored alpine lake, a waterfall, a mountain view in their little corner of Northwestern Montana. Regardless of the day’s itinerary, he’d say “Sarah, look around. All of this – these trees, this trail, this wildlife – this belongs to us. We’re not rich, but we are special. We’re Montanans.”

Later in life I understood how Montana’s Constitution and laws set us apart. Ever visit Texas? No offense to the Lone Star State, but not a lot of back roads for a weary traveler to (legally) set up camp for the night. Go to California for an untrammeled glance of the sea? It might take you hours to drive to public land, and twice as long to find a campsite. Colorado might be better for those who love to hike and ski, but private landowners largely control access to the best trout streams.

Montanans, on the other hand, have a constitutional right to a “clean and healthful environment,” and all of us are charged by that constitution to protect our public land, air and water. Our stream access law gives us room to roam and the right to fish, float or even stroll along the banks of our navigable water ways up to the high water mark. In return, anglers flock to our blue ribbon trout streams year round, from the Stillwater to the North Fork of the Flathead.

Numerous studies highlight the sheer economic benefit of public lands, and in particular, wild places to the west. In January 2013, our friends at Headwaters Economics recently demonstrated that protected, federal lands increase per capita income.

At the Montana Ambassadors’ conference, business leaders, government officials and community partners explored how to keep visitors exploring, and how to capture their best ideas and make them our own. For those of us who love to hike and explore our state parks, remember that our tax dollars pay for the state agencies maintain and protect them. Think about the roads that lead to your favorite trailhead, and the ranger who manages your most treasured wilderness area or national park. Public land and water are part of the public infrastructure, a worthy investment managed and paid for by all of us.

We are charged by those who came before us to protect what we most love about our special place – the clean air and water, the uncommon beauty, and the amazing access to public land and water. As stewards of this place, we must maintain the infrastructure –the trails, roads and river access points, and the public employees who do this critical work. And in return, our abundant land and water will continue to set us apart from our neighbors, providing the time and space to connect to family or ourselves, and bringing new entrepreneurs and their investment and jobs.

The Earned Income Tax Credit: Strengthening Working Families

The Earned Income Tax Credit (EITC), the nation’s most effective tool for reducing child poverty and supporting working families, would be strengthened for workers without children in President Obama’s 2015 budget.  Congress should take a serious look at this proposal. Furthermore, working Montana families would benefit from a state credit tied to the federal EITC

In 2011, 86,646 Montana households received the federal EITC, pumping over $169 million back into the pockets of working Montanans earning low wages.  

 However, the current EITC provides little to no help for working adults without children.  The President’s budget proposes to double the maximum credit for childless workers to $1000 and lower the age limit to 21.  Under this proposal, 52,000 Montana workers without children would either become newly eligible for the EITC or receive a larger EITC, and see the taxes they pay reduced. 


 We’ve written before about the benefits of investing in Montana’s working families, by building upon the federal EITC at a state level.  Montana is one of only a few states to impose income taxes on working families living in poverty.  Over 33,000 Montana families are working, but remain below or near the poverty line. 

So what would a state EITC mean for Montana’s working families?  A state tax credit set at 20% of the federal EITC could provide Montana low-income working families with a boost in income of up to $1,178.  For a single mother in Great Falls, that income boost could pay for over a month of her child care and transportation costs, so that she can keep working.  A state credit in Montana would build on the federal credit to lift more Montanans from poverty and improve the future for Montana’s children

The federal EITC has been a success in lifting working Montana families out of poverty. A state credit could work with the federal credit to do even more.  Both Congress and state lawmakers should think seriously about expanding EITC and investing in hard-working Montanans. 

One million dollars – gone.

Montana lost out on a million dollars this month. And last month, and the month before that.

And we’ll keep on losing that money because last November Congress allowed a temporary increase in Supplemental Nutrition Access Program (SNAP) benefits to expire and these dollars left our state. They flew off the dinner tables of Montana families. They disappeared from the cash registers of local grocery stores. They went missing from the fields of our farmers and ranchers.

When these dollars left Montana, a large number of families were still struggling to recover from the recession, and relying on SNAP benefits to help put food on their tables. After the cuts, households had an average of $22 less a month to spend on groceries.

$22 a month might not sound like a lot. But for a low-wage family on a tight budget, it is.

This cut means three fewer chuck roasts to put on the table at the end of a long day’s work. It means six fewer gallons of milk for kids to pour over their breakfast cereal. It’s seven fewer loaves of bread for a mom to make sandwiches for school lunches this month.

Milk bought in Montana grocery stores, and wheat grown in Montana fields. SNAP dollars flow through our local grocery stores, our farms, and our ranches. They strengthen not only families who need help putting food on the table, but our entire state.

The effect of this cut is still rippling through our state. Food banks, soup kitchens, and homeless shelters are bearing the burden as families who can’t afford enough to eat must rely on other options.

SNAP provides vital help for Montana families. We can’t let Congress take food off the tables of hungry Montanans again.