HELENA – Arguments over competing tax proposals took center stage Wednesday as the Legislature prepared for a break at its halfway point by advancing proposals favored by Republicans.
House Republicans advanced two of their ideas for tax cuts — a day after rejecting a move to advance Gov. Steve Bullock’s $400 rebate plan.
The chamber approved a GOP $100 million property tax cut, House Bill 230, with a mostly partisan 61-39 vote. And the Chamber of Commerce’s version of a business equipment tax, carried by Republicans, received bipartisan support in a 96-4 vote.
The chamber advanced the proposals a day before it plans to take a long weekend after completing half of the scheduled 90 days in the session.
Republicans argued their property tax cut fairly reduces taxes for all landowners, big and small, by reducing the statewide property tax levy by half. They said the state should spend some of its $400 million-plus surplus on such a tax reduction.
Democrats argued it the gives average homeowner only a $44 annual tax cut, while some big corporations will reap millions. The state could also come up short in future budget periods because of the tax cut, the opponents argued.
“There is no free lunch,” said Rep. Douglas Coffin, D-Missoula. “If we give up revenue then we can’t fund other things.”
Democrats tried unsuccessfully a day earlier to use a floor vote to advance the governor’s proposed $400-per-homeowner rebate, which is stalled in a Republican committee. They argue it is better to put the money in the pockets of average Montanans, who will spend it locally.
Republican Rep. Scott Reichner of Bigfork called the rebate a “gimmick.” He argued the GOP plan spreads the benefit “equally and fairly.”
“I think you can see here, folks, that this is the great divide between the parties,” he said. “Do we believe it is the government’s money that we need to keep here, or do we believe it is the taxpayers’ money that we need to give it back to them?”
The chamber overwhelming backed a measure to cut the business equipment tax in a 96-4 vote.
That one, the GOP-backed House Bill 472, exempts a company’s first $250,000 in equipment from the tax. Supporters said it will exempt roughly 14,000 smaller businesses from the tax altogether, and cost state coffers about $20 million.
It is one of several business equipment tax proposals this session.
House Republicans have tabled Bullock’s plan to reduce the business equipment tax by increasing the threshold on businesses exempt from $20,000 to $100,000.
Senate Republicans are advancing a plan, Senate Bill 96, to cut the tax in half on the first $10 million of property.
Both of the tax cut proposals endorsed in House floor votes Wednesday still must be fit into the overall House budget plans before a final floor vote and review by the Senate.