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Montana voters approve payday loan, real estate tax initiatives

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HELENA - Montana voters on Tuesday passed ballot measures capping the interest rate on payday loans at 36 percent and amending the state constitution to block the government from ever imposing a certain type of real estate tax.

They also appeared be in favor of abolishing 7,800 outfitter-sponsored hunting licenses. But voters rejected calling a convention to rewrite the state constitution.

With relatively low-profile races at the top of the Montana ticket this year, the four ballot measures garnered a good deal of publicity this campaign season.

Voters overwhelmingly adopted the ballot initiative to put a

36 percent cap on payday loan interest rates, which can now run at annualized interest rates of up to

650 percent. With 77 percent of precincts reporting, about 73 percent of voters approved the payday loan cap.

Supporters of the initiative say payday lending aims to trap vulnerable segments of the population in debt, but add they wouldn't have been able to fight the industry without the initiative process. Opponents failed in a legal challenge of the initiative's legitimacy.

"We're really pleased the people of Montana had the chance to vote on this despite (the industry's) efforts to knock this off the ballot," said C.B. Pearson, the campaign manager for the group backing the initiative. "I think it's going to be a good opportunity for people who get into a cycle of debt to get out."

The loans typically allow a person to borrow up to $300 for a short period, usually two weeks.

The lender can charge up to 25 percent of the value of that loan, or $75 in the case of the $300 loan.

Opponents argued their business is already regulated by the state, and the cap would allow them to charge just a $1.38 fee for a $100 loan, which would effectively put the lenders out of business.

Bernard Harrington, the owner of six EZ Money Check Cashing stores, said he couldn't imagine a scenario where he'd be able to continue lending money under the new rules.

"There will be nobody who is doing loans," Harrington said. "I'm sure there will be a downsizing in the industry and a lot of people who will be unemployed."

Voters approved a proposal to change the Montana constitution to prevent the adoption of a tax on the sale or inheritance of property. No such tax exists in Montana, but it has been suggested at the Legislature in the past.

The proposal was backed by real estate agents and business groups, which poured money into the campaign.

But opponents had said the constitution should not be changed to include tax code, an area they said should be left to the Legislature. The state also should not close off any potential sources of revenue during an economic downturn, initiative opponents argued.

Nearly 73 percent of voters approved the measure with 78 percent of precincts reporting.

Voters also leaned toward passing the initiative to abolish 7,800 guaranteed outfitter-sponsored hunting licenses and raise fees on nonresident licenses by about half.

The measure pitted public access advocates against outfitters and some landowners who rely on income from visiting hunters.

Supporters said the measure would reverse a trend toward the commercialization of public wildlife. Critics said passage of the initiative would undermine the ability of many small outfitting businesses to market deer and elk hunts to well-off clients.

With 78 percent of precincts reporting, 55 percent voted in favor of the initiative on outfitter licenses.

Finally, voters rejected a ballot question on whether the state should call a convention to rewrite the constitution. Every 20 years, a ballot measure asks the voters whether they want to call such a convention.

About 59 percent of voters said no to the ballot question with 78 percent of precincts reporting.

The 1972 Constitution was adopted by 100 delegates in March of 1972 and ratified a few months later by the voters.


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