Montana Republicans are pushing for a special tax refund session

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Republican lawmakers are divided over calls to convene in special session to pass income and property tax breaks, the latest proposal to deal with a sizeable state budget surplus.

Two separate requests for a special session, a comparatively rare phenomenon in Montana politics, have emerged. Everyone faces the hurdle of either getting the governor on board or winning over the majority of lawmakers. And while Republicans hold more than enough seats to make the latter path possible, some factional flare-ups mean not every member of the majority faction is behind the effort.

Rep. Brad Tschida, R-Missoula, and Republican nominee Lyn Hellegaard, who is running to succeed Tschida in his House seat, ignited the effort late last month with an op-ed in the Missoulian proposing a $3,000 maximum to return to the state income taxes to individuals filed in Montana in the 2021 and 2020 tax years.

Rep. Brad Tschida, R-Missoula

That call was followed up in mid-August by one by Senator Greg Hertz, R-Polson, who proposed paying off the surplus with $1,000 rebates for Montana homeowners who have paid property taxes in the past two years, rebates of up to $1,250 for individuals and $2,500 for couples who paid income taxes during those two years and $100 million to help pay down federal debt.

According to Legislature analysts, the government revenue at stake is between $1 billion and $1.4 billion, above the baseline of the current biennium. This surplus is a product of higher-than-predicted tax revenues.

The two jabs are said to be separate. Only Hertz, along with nine other lawmakers, has initiated the process to call the legislature into a special session by having the secretary of state consult the legislature to determine whether a majority supports a special session.

“Obviously, when overpayment of this magnitude occurs, people expect it

Montana and fiscally responsible to the state government to repay the overpayment in an efficient manner and on a reasonable timeline,” Hertz wrote in his letter asking for the election.

This application was submitted to the Secretary of State on August 12. Lawmakers have 30 days to respond; Non-responses will be counted as dissenting votes.

Republicans hold 67 out of 100 seats in the House of Representatives and 31 out of 50 seats in the Senate — more than enough to win the simple bicameral majority needed to authorize a special session.

But some prominent voices in the party have opposed the proposals, notably Rep. Llew Jones, R-Conrad, chairman of the House Appropriations Committee and de facto leader of a subgroup of comparatively moderate Republicans who regularly find themselves at odds with conservative lawmakers like Chida .

Jones and his allies have so far opposed a number of special session proposals in this interim period, such as restricting abortion in the aftermath of the US Supreme Court’s Dobbs ruling, passing election integrity measures, or creating new maps of the Public Services Commission.

Rep. Llew Jones, R-Conrad

Jones said the current special session proposal would present a relatively rare opportunity to invest a large surplus to benefit taxpayers in the long term — an opportunity he says is better suited to the regular session, where passing a budget is the only constitutional one obligation of the legislature.

In his own July comment, Jones called for the money to be used to bolster the ailing Warm Springs state hospital, boost the state’s wildfire and emergency funds, pass temporary property tax cuts and more. Democrats, meanwhile, have proposed investing $1 billion in excess funds into affordable housing, child care, property tax breaks and mental health services.

“It takes away a discussion,” Jones told Montana Free Press last week about the proposal for a special session. “Can we do something for mental health? Can we do simple things like $500 million or $600 million for unfunded pension obligations? At least there should be a conversation. It takes away our ability to consider those investments that will benefit future taxpayers.”

Over the weekend, another comparatively moderate and Jones ally, Rep. Frank Garner, R-Kalispell, wrote his own op-ed asking why lawmakers were directing the legislature to hold a special session just over three months before the scheduled meeting of the regular assembly wanted to gather session.

Special sessions have been convened in the past to deal with immediate emergencies.

“The current proposal is to target about $1.5 billion in about two days,” Garner wrote. “As I reflect on my weighty decision on this meeting call, my first concern is whether this proposal is being driven by an imminent emergency or by those who want to write checks to voters because their emergency is merely an upcoming election.”

If convened, the special session would likely be held immediately before ballots are mailed out in October, he added. Chida, for example, is running for an open Senate seat in a contested Missoula district against current Democratic Representative Willis Curdy.

“Had we been able to do this earlier, when we wanted to call a special session a month ago, it wouldn’t have run counter to the election,” Tschida said in response to Garner’s suggestion Monday.

Tschida also said there were good reasons not to wait.

“My first concern is whether this proposal will be driven by an imminent emergency or by those who want to write checks to voters because their emergency is merely an upcoming election.”

Rep. Frank Garner, R-Kalispell, in a comment from Missoulia

“Why do I think we should wait to give taxpayers their money back during the session when two things count against it: we have new lawmakers who don’t understand the process and how it works, and until such time as a decision is made.” these taxpayers will probably not get their money back until June, July or August next year,” Tschida said.

The Republican leadership is also divided on the idea. House Majority Leader Sue Vinton and Senate Majority Leader Cary Smith, both from Billings, were both among the signatories to Hertz’s letter and have urged voters to ask their representatives to support a special session.

Senate President Mark Blasdel, meanwhile, approved the concept of returning money to taxpayers, but commented noncommittally on the details.

Rep. Kim Abbott, D-Helena

“Legislative Republicans are thrilled to return excess taxpayer money to the taxpayers who paid for it,” Blasdel said in a statement. “The timing of a legislative session to achieve this and the precise mechanisms for returning the money are points of ongoing debate among lawmakers.”

Those pushing for a special session have found no support among Democrats. House minority leader Kim Abbott, D-Helena, told MTFP her caucus was unanimous against the idea, noting the tens of thousands of dollars needed to hold a special session of questionable utility.

“We have a pretty comprehensive plan in place for how we think some of the income credit should be spent in this session,” she said. “We see this as a pretty expensive choice game for taxpayers.”

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