Yes, Montana could use some tax relief
Governor Greg Gianforte today called on the Montana State Legislature to approve his plan to provide property and income tax relief. The governor's plan is a $1 billion proposal.
Roughly $500 million would be used for property tax relief in Montana - a $1,000 property tax rebate in both 2023 and 2024.
Governor Gianforte also wants to increase the state's earned income tax credit, and reduce the state income tax from 6.5% to 5.9% - a move that would immediately make Montana more competitive with its neighbors, including Idaho, which just lowered its state income tax to 5.8%.
The governor's budget also "cuts taxes for Montana's small business owners, family farmers, and family ranchers by expanding the business equipment tax exemption from $300,000 to $1 million."
Like Idaho, Montana can afford tax relief as it has an enormous surplus.
While distributing rebate checks is welcome, policymakers should aim for more permanent tax relief. If rebates are needed, the government is over-collecting.
Today, we released a study on how Montana and Idaho can tie their state income tax rates to revenue triggers. Properly designed, the revenue trigger option can result in numerous benefits and negate the need for tax rebate checks.