Great Falls Tribune - April 21, 2017
A House panel on Friday approved doing an interim study that would look at replacing property tax with sales tax, a move made a few hours before a 414-page bill by the same lawmaker that would revise taxes and the distribution of revenue through sales tax died on the House floor.
Rep. Kerry White, R-Bozeman, proposed the study through House Joint Resolution 43, saying he’d like to see property taxes replaced with a 2 percent sales tax.
Those opposed to the study said sales tax unfairly hurt low- and medium-income families more.
The House Taxation Committee voted 13-7 to proceed with the study. The proposal will move to the House floor.
According to the proposal, property tax revenue represents 12 percent of the state budget.
The study, to be completed before Sept. 15, 2018, is to look at which goods and services to tax, the revenue that could be raised from a sales tax, and the funding mechanisms to replace certain classes of property tax collections.
White received support for the study from the Montana Taxpayers Association and the Montana Chamber of Commerce.
Bob Story, president of the Montana Taxpayers Association, said such a study could have an educational benefit for lawmakers as to the state’s tax situation.
“It would be helpful,” he said.
Bridger Mahlum of the Montana Chamber of Commerce said it has been years since taxes have been looked at in depth.
“We could get much-needed answers,” he said.
Heather O’Loughlin, co-director, research and development of the Montana Budget and Policy Center, urged the board to vote against a study.
She said sales taxes disproportionately hurt low- to moderate-income families.
“The Legislature does not need a study to know that,” she said.
White noted that Democratic Gov. Steve Bullock and Republican challenger Greg Gianforte both opposed a sales tax in the November election.
But, he said, constituents tell him they would not support a sales tax without getting rid of another tax.
He said a sales tax may show it could be feasible to get rid of the property tax.
Later that day the Legislature defeated House Bill 620, a proposal by White that revises taxes and distribution of revenue through sales tax.
White said it was his goal to get rid of property tax and quit kicking people out of their homes. It would be replaced with a sale tax.
The bill died with an 18-82 vote.
Rep. Greg Hertz, R-Polson, said White showed political courage in bringing the bill to the House floor and called property tax the “worst form of taxation” foisted upon people.
White said it took legislative staff four months to draft the 414-page bill and one month to do a fiscal note.
Rep. Tom Jacobson, D-Great Falls, criticized the amount of paper, the time and the cost of the bill.
“Talk about a bill that won’t get across the governor’s desk,” he said, adding he didn’t understand all the waste.
White said he did not come to Helena to further his political career, which he jokingly said may have ended on the floor Friday.
Jacobson later apologized for his comments.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.