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Gianforte unveils first budget: Tax cuts, drug treatment, spending scale-backs

Posted at 6:19 PM, Jan 07, 2021

HELENA — Governor Greg Gianforte’s first proposed state budget, released Thursday, offers cuts in state income, property, and business taxes for some – and more spending aimed at beginning teacher pay and drug treatment.

“This budget is the roadmap for Montana’s comeback,” Gianforte said at a Capitol news conference, as he unveiled the proposed budget for the 2022-23 biennium. “I promised we would provide tax relief to hard-working Montanans and get open for business. This budget does that.”

Gianforte is proposing $5.27 billion in state spending over the next two years, compared to the current two-year total of $5.08 billion, which includes the actual amount spent for fiscal 2020 and the budgeted amount for 2021, which run through June 30 this year.

Montana’s first Republican governor in 16 years said he’d cut some $100 million out of the budget proposed last November by outgoing Democratic Gov. Steve Bullock – enabling him to “hold the line” on spending, as he promised during the campaign.

The budget now goes before the state Legislature, where Republicans hold large majorities and have said they’re largely in sync with the governor on his priorities.

Rep. Llew Jones, R-Conrad, who chairs the House Appropriations Committee, said lawmakers naturally will come up with some of their own ideas – but if it costs money beyond the governor’s budget, it will have tough sledding.

“I believe there will be a lot of good ideas, but a lot of these ideas, if they come in with a fiscal note, it may not be the year to have a good idea,” he told MTN News.

Democratic House Minority Leader Kim Abbott said Thursday that Gianforte’s proposal is the “starting point of a lengthy legislative budget process,” and that her caucus would oppose any unnecessary cuts “to pay for tax breaks for the wealthy.”

Gianforte’s most expensive tax-cut proposal is a reduction of the state’s top income-tax rate, from 6.9 percent to 6.75 percent – a rate paid by about half of the state’s taxpaying households, he said.

If passed, the tax cut would cost the state treasury an estimated $28 million a year, once fully implemented.

Other highlights of the proposed budget include:

  • About $47 million in new state and federal spending to attack what Gianforte called an “epidemic” of drug use and addiction in the state. The money would pay for drug-treatment courts, more probation and parole officers, and treatment programs in the correctional system. “Few Montanans have been left untouched by the epidemic of addiction and drug use,” he said. “The crisis is ripping apart our families and our communities.”
  • About $2.5 million to help local school districts increase beginning teacher pay, which Gianforte called the lowest in the nation. He also included a $1 million-a-year tax credit for businesses that offer training in skilled trades.
  • Increasing to $200,000 the value of business equipment exempt from property taxes. He said an additional 4,000 businesses would have to pay the tax, costing the state about $1.5 million.
  • Adding $3 million a year to programs that help low-income homeowners offset their property-tax increases.

The Gianforte budget also removes nearly $101 million in state spending proposed by former Gov. Bullock – including $26 million from the state university system, part of which would be used to freeze college tuition.

Other big chunks of reductions from Bullock’s budget are $12 million in “vacancy savings,” which means state agencies must leave some positions open before filling them; $23 million from the Department of Public Health and Human Services, including proposed state funding for pre-kindergarten; and $9.5 million from the Department of Natural Resources and Conservation.