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Candidate proposes 20 percent cut in state income taxes

Montanans are tired of being at the bottom of the nation's economic list, but that can be fixed with major changes to the state's tax policies, Republican gubernatorial candidate Rob Natelson said Tuesday.

The University of Montana law professor spoke at the Women's Law Caucus candidate's forum in the Missoula Public Library. He's the fourth of the state's five major party contenders for governor to visit the caucus. The final forum features Republican Lt. Gov. Judy Martz on April 25.

"There's nothing written in heaven that says we have to be poor," Natelson said. "We can look at choices we've made in our fiscal policy and correlate it with ups and downs in our economy."

While there are many aspects of the state's economic climate that are uncontrollable, the biggest lever that can be moved is the tax burden, Natelson said. He proposed a 20 percent cut in state income taxes, phased in over four years, to stimulate economic growth.

The state's current budget surplus would cover the first two phases of that tax cut without any loss of government spending, he said, and the second two years' cuts could be absorbed by restraining the growth of state spending.

He charged that all three of his Democratic contestants and Martz also were offering economic plans that relied too much on state investment and promotion. Montana's business and employment picture would be brighter if the state took less in taxes and trained its regulatory staff to encourage rather than hinder business growth.

"You've got this hostile attitude (of business regulation) that you don't have in other states," Natelson said. "That's the responsibility of the governor, because those agencies are in the administrative branch."

He said he would fight the federal government to give Montanans more access to federal land in the state, and pledged to appoint state Supreme Court justices who "respect and follow the rule of law."

"Investors don't invest in a state where the rule of law is not stable - look at Russia," he said. "This is not a liberal-vs.-conservative issue. It's at the heart of our concept of society."

Natelson said the experience of states such as New Jersey and New York show that lower tax rates may actually increase state tax revenue, because the private economy blooms. A better business climate could overcome Montana's geographic isolation by allowing the state's assets to shine, such as its well-educated workforce and niche agricultural products.

If elected governor, Natelson said he would also work to privatize much of the state's road maintenance activity. He called for increasing competition in K-12 education by allowing tax credits for private school tuition, encouraging creation of charter schools and authorizing tuition-free open enrollment at any public school in the state, on a space-available basis.

He also proposed spending the state's higher education budget on scholarships direct to Montana high school graduates, who could use them at any state school they chose. The university system should be decentralized and each campus allowed to design tuition levels and course offerings that best attract those students, he said.

Reporter Rob Chaney can be reached at 523-5382, or at

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