House Bill 148 would require a supermajority of the Montana Legislature to add a new tax or fee or increase an existing one. It passed the House 53-46 and is now in the Senate.
The problem is that it addresses no problem. Sixteen states require some type of a supermajority for approving taxes. Studies indicate that the requirement has had little effect on revenue levels in those states over time, but it has created serious problems.
The biggest problems have occurred in states like Oklahoma, which cut state taxes severely in 2015 and then faced large revenue shortfalls to fund basic services. It took reducing schools to four-day weeks and a teachers’ strike before the state finally overcame the state’s three-quarter supermajority requirement to address the problem. As with Wisconsin and Nebraska, supermajority states that created similar self-inflicted crises, it is typically the most vulnerable of our citizens who get hurt the most.
HB 148 would strangle the Montana Legislature’s ability to deal with a crisis that might require finding new revenue. Think of the harm caused to our state’s most vulnerable citizens by the revenue shortfall last biennium. We failed to deal adequately with that crisis under normal majority requirements and despite a special session.
Then there is the issue of budgeting and democracy. Public budgets can be complex, but they really address only four basic questions. First, what do we want the government to do? Second, how much will it cost? Third, where is the money coming from? Fourth, did we accomplish our goals within budget?
HB 148 would mean that a proposal with strong bipartisan support, known costs and a legislative majority could have the proposal blocked by 17 senators. This is giving veto power to a very small group of legislators. It would also make it much harder to eliminate outdated or wasteful tax breaks for special interests. This is neither responsible budgeting nor functioning democracy. The supermajority required for state bonding has already prevented the passage of much-needed infrastructure bills, with bipartisan support, in the last two sessions
Finally, there is no great initiative to raise Montana taxes. Our marginal income tax rate 25 years ago was 11 percent, highest in the nation along with Vermont. It is now 6.9 percent. Property taxes are reasonable. We have no sales tax. No one is going bankrupt from vehicle fees. We have a tax code with many loopholes, but that is a separate issue. If you do not trust a majority of our legislature to address fairly any issue that arises, vote for someone else. That is the way democracy works.
If HB 148 will not solve a problem, while potentially creating several, what is the real motivation behind the bill? There are groups like Americans for Tax Reform that simply oppose taxes, despite the fact that they pay for our schools, roads, parks and public safety.
Also, if a legislator does not favor something like Medicaid expansion or support for public preschool, a good way to kill such programs would be to strangle any additional funding with a small minority of like-minded individuals. In this case, HB 148 would be a tool for thwarting the public will under the guise of protecting the citizens.
Whether the real rationale is an ideological opposition to taxes, a mechanism to thwart legislative majorities, or something else, it is a bad piece of legislation. It should be opposed by any legislator who favors democracy in action and believes in responsible budgeting. The legislature and the governor are quite capable of dealing with tax and funding issues as they arise.