A bill to reduce state taxes on Social Security income moved out of the House Appropriations Committee on Thursday.
Senate Bill 217, which was approved 12-10, would exempt from taxes the first $30,000 in Social Security income for a single person and $60,000 for a couple.
The Senate passed the bill 31-19 in late February and the House endorsed it 61-39 on second reading Monday. The current exemptions of $25,000 for an individual and $32,000 for a couple were set in 1983 and have not been adjusted for inflation.
The bill was referred to the House Appropriations Committee and will move now to the House floor. A fiscal note estimates the proposal could save Montana seniors a combined $21 million a year starting in July 2020, with that number increasing as the state’s population ages.
When he introduced the bill in February, Sen. David Howard, R-Park City, cited the case of an 85-year-old constituent who was working as a greeter at Walmart so he could pay his taxes, saying
“I think the state is doing something wrong.”
Howard addressed the appropriations committee Thursday.
“The reason for this bill is that our taxes have been going up tremendously,” he said.
Gene Walborn, the director of the Department of Revenue, opposed the bill.
He said the $20 million a year is not sustainable.
Heather O’Loughlin, co-director of nonprofit Montana Budget and Policy Center also opposed the bill, saying it was a significant loss of revenue.
Howard described the budget as looking at a plate of spaghetti. He said in the last biennium property taxes went up $52 million.
“When you look at the total entity as a state we can certainly afford this bill,” Howard said.