Taylor mulls over finances
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So much is happening so fast here in Helena. How about raising the gas tax 5 cents? Right now the federal gas tax is 18.4 cents per gallon and the state adds 27 cents more. This bill is sponsored by Representative Nancy Wilson, D - Missoula, but I doubt that it will pass out of the House Transportation Committee.
Federal Highway money is a worry. We use our share of the gas tax to leverage federal funds. Of every dollar that we spend on roads, 86 cents comes from the feds. There is a debate in D.C. to raise their gas tax and even talk about charging per mile instead of per gallon. Oregon had a charge-per-mile test program that they did not continue.
Speaking of taxes, Senator Bruce Tutvedt-R, Kalispell, has a great bill to streamline Montana taxes. Right now we have 50 additions or subtractions, detailed in the 48 page Montana income tax booklet. Our income taxes would start with your federal taxable income and there would only be a one page tax form.
The CPA association was in favor of this bill. It will reduce preparation time. We call taxpayers that have increases in taxes “losers” and those that will see a decrease “winners.” This simplification bill has very few losers. The biggest loser group is married taxpayers that file separately.
There are also a couple of property tax bills in the works. Should the six year reappraisal cycle be shortened to two years? Last time the six year cycle kept values high in the descending market. This time a six year cycle will probably do the exact opposite; keep appraisal values lower as the market increases.
I have to keep reminding everyone that the appraised value of your home is not as important as the mills set by the counties. The state share of property tax is about 20 percent and the rest goes to the counties, cities and schools.
The county and schools need to fund their services, so the mills float to assure the same amount of money can be raised each year. And we often increase our mills by voting for school needs, library, pool and safety requests.
The governor’s revenue estimate is $359 million higher than the legislative fiscal division‘s estimate. We heard a revenue report from UM Bureau of Business and Economic Research last week. The projected growth in 2013 and 2014 was lower than expected, 2.1 percent versus 2.7 percent. The experts are worried about global commodity prices, oil investment, timber availability for Montana mills, etc. The largest Montana oil producer plans to cut spending 40 percent.
This is why I am concerned about the large revenue estimate. We need to be careful with our money. Our fiscal strength is due to the Montana constitution that requires our proposed spending to balance with our revenue estimate.
That brings up HB 5, the governor’s infrastructure bill. Once again I call it pork-for-all but the governor calls it “build Montana.” Regrettably, too much of this is bonded. The governor and his budget director both said that bonding is better than using cash. Why? Because interest rates are low on borrowed money.
Well, the cash in the bank isn’t getting any high interest. Two year treasury notes yield less than .5 percent and 20 year treasury notes are only 2.2 percent. Why would we borrow $192 million? The interest payments would be $93 million total at the 4.4 percent interest rate projected. That is your debt.
The state chapter of the American Society of Civil Engineers gave us a C-minus for infrastructure. Do you think this has anything to do with their desire for state contracts? And we’ve heard from other contractors and engineers that the Build Montana program is good. Seems they all want your money.
Leave me a message at (406) 444-4800. My cell is (406) 253-8766 but it is usually off. Email me at sen.janna.taylor@mt.gov.
