December 19, 2014
The legislative session starts on January 5th. I have two committees every morning, Tax and Finance & Claims. During our caucus I was elected to the senate Committee on Committees. The six of us determine the committee members and the chairs.
I vice chair the General Government Joint Sub-committee of Finance and Claims and I am a member of Taxation. I have served on both of these before, but it will take lots of study to keep up.
Every Monday, Wednesday and Friday afternoon I chair the Local Government Committee. We already have a couple bills to hear, one on firecrackers and another on the revolving loan program. Tuesday and Thursday afternoons I am a member of Transportation.
Last month my Interim Revenue and Transportation Committee voted on a revenue estimate. We have some actual numbers, tax receipts so far, but forecasting is very difficult. Personally, we really enjoy the lower gas prices, but the price of a barrel of oil seriously affects our corporate and individual taxes next year. Drilling has slowed down in the Bakken and we have many businesses dependent on that production.
Roughly our total budget for 2015 is $2.2 billion state revenue, the same amount from the feds, and smaller amounts that are called state special, for a yearly grand total of $5.3 billion. The federal money is designated primarily for health and human services, transportation and education. The Governor's revenue estimate was about $300 million higher than the legislative fiscal estimate. Our interim committee split the difference to come up with a revenue starting point.
The best part of the Montana Constitution is that we balance our budget. The spending cannot exceed the revenue estimate with a small cushion.
The pre-Kindergarten plan will grow government. Many school districts do not have extra money for buildings or improvements, new teachers, and new administration. There is a federal grant but not enough to pay for the changes. Taxes, especially property taxes, are always an issue. We plan to reduce the reappraisals to every two years and change some of the variables that make the system so complex.
A bill to ratify the water compact between the state, the federal government and the Tribes will be introduced. Last session the compact bill would have cost the taxpayers $55 million. Whatever the outcome, this will go to court and that might be the only way to fix the constitutional problems I see.
You can watch the floor sessions and most of the committees on your computer. Go to leg.mt.gov.
The best way to contact me is to leave a message at 406-444-4800. My new email is email@example.com and my website is jannataylor.com. I will continue to write weekly. Please contact me anytime. I work for you.
March 10, 2014
At the Revenue and Transportation Interim Committee meeting last month we discussed one of everyone's least favourite topics, property taxes. Six years have passed since the top-of-the-bubble 2008 appraisals.
The new appraisals will be based on the value of our property as of January 1, 2014. According to the Director of the Department of Revenue, most residential property has returned to the 2008 level. There are a couple of exceptions; in the northeast and Billings's values have sky-rocketed and in Missoula, they are down nearly 5%.
It will take the department about a year to complete their assessments, so we will see our statements at this time next year. We will have preliminary data this fall. Last legislative session we were unable to agree on a bill to reduce the six year cycle to one or two years. You may remember that I was worried about the aerial evaluation system. Too much like spying, but I think it is the wave of the future.
I have not been able to get an answer to the question: will Governor Bullock ask for no net increase in property tax like our last Governor did? There will still be winners and losers, just like last time, but this might help most of us.
The main problem will be with agricultural appraisals. Agriculture taxes are based on production, and commodities have risen sharply. I expect our ag producers to be pretty upset.
Our system pits residential against commercial against agricultural against forest land. Compared with other states Montana ranks about in the middle for property taxes. But we rank second form the bottom in average income.
With no sales tax we have to realize that income and property taxes have to support our state. Only about 30% of property taxes go to the state, most for schools, and rest supports the county.
Now for revenue - besides the federal dollars the state receives, individual income tax is our main source of funding. Collections are coming in as expected. Looks like we will have a surplus similar to the beginning of last session.
But there is still some concern. Corporate taxes are way down so far. We will know the whole story after April 15th. Also, the legislative fiscal staff uses information from forecasting experts. They say much like we all say; slow growth.
But they just sent out a revision. The gross domestic product (GDP) projections are down. Why? Bad weather, Obamacare, slow car sales and weaker exports. Also, in the next few years they project the price of a barrel of oil will fall below $100.
By the way, you pay your state employees very well. Not school, state. The average salary of executive branch employees is $45,360. The real money is in benefits - retirement and healthcare total an average of $17,000 per year. Remember that most benefits are not taxed. Guess that's why Obamacare wants the value of Cadillac health plans listed on our taxes next year.
This is the 100 year anniversary of women's suffrage in Montana, six full years before the 14th amendment to the constitution. And it is the 97th anniversary of the election of the first woman to the US Congress, Republican and pacifist, Jeanette Rankin from Montana.
Please call me with any questions or comments. My cell number is 253-8766. Or email firstname.lastname@example.org. Never forget that I work for you.
May 1, 2013
We still donít know all the final details in the $10 billion budget. There are several bills still on the governorís desk. Some of them spend a lot of money, so they may get vetoed.
The latest balance sheet still has all the spending bills listed, so the bottom line looks bad: negative $7.2 million for fiscal year 2014 and negative $20.9 million for 2015.
At the end of the session, the governor negotiated $13.5 more spending in the big budget bill. Many of us wanted to see some of the surplus returned to the taxpayers.
There are two tax bills still waiting on the governor. One bill, SB 282, simplifies Montana taxes, making our tax forms more like the federal tax forms. We had dozens of credits and exemptions. Pension, annuity and interest credits still are there for seniors. SB 282 also lowers our top tax bracket to 6 percent from 6.9 percent.
These changes are expected to save a lot of Department of Revenue staff time and the CPA Association said it will make filing Montana taxes much simpler.
The other tax reform is SB 96, to lower the business equipment taxes. I believe that the first $100,000 in equipment will be exempt, and then there is a 1.5-percent tax up to $3 million and 3 percent after that. This should help almost all of our small businesses and farmers and ranchers. Important to Lake County, there is a payback for any lost revenue. This change will help Montana attract businesses but most of our neighbors do not have equipment taxes.
I am very disappointed that the property tax bill did not pass. We worked for many weeks to get the two-year cycle perfected. Some agricultural landowners wanted to remain on the six-year plan. This time real estate values have still not fully recovered, so the six-year appraisals will benefit most of us.
If the governor doesnít veto or sign a bill, it will become law without his signature. Governor Bullock said that he would let the bill to require parental approval for a minor to obtain an abortion become law because he expects a lawsuit.
So in Montana, a minor needs parental approval for body piercing or tattoos, but not for an abortion. Doesnít seem logical. Of course, there is a judicial override if a minor must avoid her parents.
The pension reform bills had a reduction in the yearly guaranteed benefit increase. Hereís another lawsuit. Employee benefits are contractual. But some cities and counties have been able to reduce benefit packages as part of bankruptcy. Because of our balanced budget requirement, Montana is a long way from that problem. Still, the unfunded liability is $4.2 billion.
It is great to be home. Iím watching the final disposition of bills and waiting for interim committee assignments. Looks like Iíll be on revenue and transportation as well as one or two other committees.
Iíd like to thank everyone for the comments and opinions throughout the session. You can reach me on my cell at (406) 253-8766 or my email at email@example.com. Remember that I work for you during the interim as well as the session.