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Senate approves Regier's tax-cut measure

Charles S. Johnson | Hagadone News Network | UPDATED 10 years, 4 months AGO
by Charles S. Johnson
| February 25, 2015 7:28 PM

HELENA — A bill to cut state individual income taxes by about $42 million a year passed the Senate Wednesday over the protests of the Democratic leader who said it was fiscally imprudent.

The Senate endorsed House Bill 166 by House Minority

Leader Keith Regier, R-Kalispell. It passed by 29-21 party-line votes Tuesday and Wednesday.

As amended by the Senate Taxation Committee, HB 166 would permanently reduce state income tax rates by two-tenths of 1 percentage point in each of the seven tax brackets. For example, in the highest bracket for taxpayers with taxable income exceeding $13,900, the tax rate would drop to 6.7 percent from the current rate of 6.9 percent.

The Revenue Department and governor’s Office of Budget and Program Planning have estimated HB 166 would cut taxes and reduce state revenue collections by $26 million in fiscal 2016, $53 million in 2017, $41.7 million in 2018 and $43.6 million in 2019.

“It is the bill you heard a week ago,” said Sen. Bruce Tutvedt, R-Kalispell, who chairs the Senate Finance Committee. “You heard and debated it. I will ask for a do-pass [vote].”

House Minority Leader Jon Sesso, R-Butte, opposed the bill, citing a status sheet issued this week by the Legislative Fiscal Division that shows the impact of spending and tax bills on the state general fund.

“We have gone from a very effective balanced budget to one $85 million under water,” Sesso said.

He questioned the wisdom of passing a bill with an across-the-board tax cut for everyone.

Sesso said, “We’ve heard a lot of good ideas — a simplification bill to make it fair across-the-board. Others have said we need a cut for blue-collar workers so we can strengthen the middle class. Others have talked very seriously about a major infrastructure investment we want to make across Montana. These are priorities, too, and it’s Day 42, and we’re moving a House bill out of the second chamber on to the governor.”

HB 166 has to return to the House for a vote on the Senate amendments before it goes to Gov. Steve Bullock. His Revenue Department director, Mike Kadas, has opposed the bill at every stage.

Sesso asked senators to keep their options open when it comes to spending and tax cuts.

“Let’s talk about a package of legislation that everyone can support,” Sesso said. “I want to talk about the priorities of this body, the Senate, ... the decisions we want to make together as a body. “

Republicans didn’t engage Sesso in debate.

Tutvedt closed by saying HB 166 is the House’s tax cut and urged a vote for it.

The Senate has already passed, again by a party-line vote, and sent to the House its own tax cut bill, SB 200, by Sen. Duane Ankney, R-Colstrip. Ankney’s bill would reduce income tax rates, widen the tax brackets and reduce the capital gains tax credit rate.

It would reduce individual taxes and cut tax collections by $17.4 million in fiscal 2016, $62.1 million in 2017, $55.7 million in 2018 and $57.8 million in 2019.

 

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