HELENA — Gov. Steve Bullock vetoed three bills late last week, including one that would have exempted more Social Security income from state taxation.
Under current law, single taxpayers earning up to $25,000 and couples earning up to $32,000 generally don’t pay any state income tax on their Social Security benefits.
Senate Bill 217, sponsored by Sen. David Howard, R-Park City, would have raised those thresholds to about $30,000 for individuals and $60,000 for couples. After a taxpayer’s income reaches the threshold, the portion of their Social Security benefits subject to income tax in Montana increases gradually with one’s income, topping out at 85 percent.
The bill passed the Legislature on mostly party-line votes, with Republicans in favor.
Bullock, a Democrat, said in his veto message that the bill disproportionately benefits senior citizens with higher incomes and would cost the state treasury $36 million over the next two years, putting needed services at risk.
“A negative impact of this magnitude would jeopardize critical services that Montanans of all ages rely on, including low-income seniors,” he said. “SB217 creates an unfunded financial risk for the state that I cannot support.”
Bullock’s veto essentially kills the bill, because not enough Republican votes in the Legislature exist to override it.
Howard told MTN News Monday that he believes SB217’s fiscal impact to the state is far less than estimated by the Revenue Department and that senior citizens on fixed incomes need a tax break.
“Everything that they have to pay for has gone up,” he said. “The bill supports those that are hurting, because our property taxes are going up like crazy, and they are the seniors that have paid taxes their whole lives.”
He also disagreed with Bullock’s assessment that the bill more greatly benefits wealthier senior citizens.
“Anyone should understand that a husband and wife that only make $50,000 or $60,000 a year is not rich in this world,” Howard said.
Bullock also vetoed a bill that would have required families to cooperate with state efforts to collect child-support payments before obtaining food stamps, and a bill that would have made it a felony, rather than a misdemeanor, to make a false report to law enforcement.
He said House Bill 290, sponsored by Rep. Peggy Webb, R-Billings, could end up denying food assistance for low-income families and would cost too much to administer.
“I do not support legislation that makes it harder for families to put food on the table and that denies food to children because of decisions made by their parents,” Bullock wrote in his veto note.
Webb has said that she believes the bill would have increased child-support payments and thus reduced costs for the state — and that it would have ended up reducing administrative costs, because of lower caseloads.
On the false-reporting bill, Bullock said House Bill 238 could end up discouraging people from reporting crimes, particularly sexual and domestic-violence crimes. The bill, sponsored by Rep. Theresa Manzella, R-Hamilton, would have increased the crime of false reporting to law enforcement from a misdemeanor to a felony, punishable with up to four years in prison and $10,000 fine.