Reporting on the recent Republican tax bill has focused on the lopsided benefits for the wealthiest taxpayers. As Montana legislators, we are equally concerned with the largely unreported affects this bill will have on working families in our state.
Preliminary estimates by Montana’s Department of Revenue suggest the bill will cost Montana roughly $45-50 million in lost revenue every year. This is on top of a $227 million budget shortfall the state just dealt with, a crisis that was created when Republican legislators passed hastily drawn up and unrealistic revenue projections, which when not met led to mandatory cuts in state services.
These cuts are hurting Montana’s most vulnerable citizens. Several mental health and disability providers already have had to severely cut back services for Montanans with developmental disabilities and mental illness and for young children. Also, the state has been forced to cut education block grants, which has triggered a $2 million increase in local property taxes for Bozeman residents, along with cuts to transportation services. If Montana has to absorb an additional $45-50 million of revenue shortfalls every year due to the Republican tax bill, things will only get worse.
There are several ways the Legislature can redress this problem.
They can restore basic fairness to state income tax rates by reversing the unfair elimination of top tax rates passed in 2003, a change which has almost exclusively benefited the top 10 percent of taxpayers, and has cost the state an estimated $900 million in lost revenue over the last 10 years. These changes mean that a working mother earning just above the minimum wage pays the same income tax rate as a millionaire.
Reversing the 2003 tax rates or adding a small income tax for the very wealthiest would significantly reduce the burden on middle-class families.
The Legislature also could allow cities like Bozeman to raise a local option sales tax on tourist services. Over 11 million visitors come to Montana and spend about $4 billion in the state every year. Many of them come through Bozeman, putting a burden on our services. Yet the Republican Legislature has refused to allow Bozeman voters to decide for themselves on whether to levy small increases on tourist services like hotels and car rentals, to help pay for infrastructure and city services. Such a “tourist tax” could go a long way towards holding down property taxes.
Republicans want us to believe that increasing the national deficit by $1.5 trillion in order to fund breaks to corporations and wealthy individuals will “trickle down” to working families. We believe in a different vision of America’s future, one built on economic fairness, where we invest in education and healthcare, and in infrastructure to help businesses thrive, a vision where we rebuild the backbone of our nation; the hardworking middle class.