A Recap of 2017 and the Work Still Ahead

For MBPC, like many of you, 2017 has been a fast-paced, intense year, and 2018 is already looking to be another busy one. As we reflect on this past year and the work ahead, we also want to thank the many Montanans who have supported our work. We have witnessed a state budget crisis, which led to massive cuts in our collective investments in education, health care, and other critical public services. We have weathered repeated federal attacks on the Affordable Care Act. And finally, we recently saw the restructuring of our federal tax code, which will primarily benefit the wealthiest and corporations.

To be sure: we have a lot of work ahead of us in 2018. But while we reflect on the many challenges this past year brought, we also want to reflect on some of the successes we shared together and how we can continue to make progress in 2018.

State Earned Income Tax Credit

We want to start with the positive. After over a decade of work by legislators and advocates, Montana became the 28th state to enact a state Earned Income Tax Credit (EITC). Throughout the session, we heard from working parents who have accessed the federal credit during difficult times. Enacting a state earned income credit is an important step forward to and helping 80,000 low- and moderate-income working families better make ends meet while also making our tax system fairer.

State Budget & Revenue

Without a doubt, our work on the state budget will continue to be challenging in the aftermath of a severe revenue shortfall and deep budget cuts. We are analyzing the real-life impacts of these cuts and also how federal tax cuts may impact state revenue moving forward. Throughout 2018 we will continue to lift up the stories of Montana families hurt by budget cuts, and we intend to return to the 2019 legislative session with revenue proposals to build a stronger state budget.

Affordable Care Act

Congress came close to repealing and replacing the ACA with several bills this past year. All of them would have caused millions to lose health coverage, weakened protections for people with pre-existing conditions, and effectively ended Medicaid expansion to low-income adults over time. Given that seniors, people with disabilities, and children comprise about two-thirds of Medicaid beneficiaries, ACA repeal would have taken away coverage from some of our most vulnerable Montanans. Although we were successful in preventing the repeal of the ACA, the individual mandate repeal in the federal tax plan is a blow to the integrity of the ACA. We must continue to stay diligent defending and strengthening access to affordable health care coverage and stabilizing the marketplace.

Extend Medicaid Expansion in 2019

Looking ahead to 2019, we are working with partner organizations to prevent the repeal of Montana’s successful Medicaid expansion, which has provided health coverage for 86,000 Montanans. Expansion has injected over $700 million in federal funds into our local communities and has saved the state over $30 million in general fund dollars in the first 18 months of enrollment. Hospitals, especially in rural communities that treat higher numbers of low-income patients, are seeing a greater number of patients with insurance and lower uncompensated care costs. Montana’s Medicaid expansion has been a success, and our state legislature will need to ensure this health care coverage for tens of thousands of low-income Montanans is maintained.

The Federal Tax Bill Passed, But It’s Not Over Yet

The federal tax bill is an expensive giveaway to major corporations and wealthy households, which offers little or nothing to most Montana families –and ultimately hurts many. While corporations are gifted permanent tax breaks, the rest of us will actually see our taxes go up in the long run. This tax cut bill increases the deficit by a whopping $1.5 trillion over ten years, and GOP leadership are already aiming for far-reaching budget cuts to food assistance, Medicaid, and college assistance next year that could make it much harder for struggling families to buy food, see a doctor, afford college, or otherwise make ends meet.

In other words, our hardest work to is yet to come.

At MBPC, we believe all Montanans deserve strong, healthy, and safe communities, so we will continue advocating for a sound state budget that prioritizes investments to create opportunity for everyone and ensure our children and grandchildren have a bright future.

Our success would not be possible without the many supporters across the state who recognize the value of this work to lift up the voices of those who are often struggling to get by. There is still time to give in 2017 to make our work even more meaningful in the coming year!

If you believe that we need to invest in this state that we love and invest in our families and communities, please support us in the work we do. 2018 – here we come!

The Truth Behind the “Expanded” Child Tax Credit for Montana Families

Meeting behind closed doors, the U.S. Senate and House conference committee reached agreement last week on the final GOP bill to massively overhaul the nation’s tax system. Congress is expected to cast votes on the tax plan today.

The Child Tax Credit (CTC) received a lot of attention last week as last minute changes were made to (almost) meet the demands of Senator Marco Rubio.

With the final bill ready for a vote, it is clear that the last-minute changes to the Child Tax Credit (CTC) that Republican leaders put in their final tax bill do not change the fundamental fact that low-income working families still would largely miss out on the full increase from the current $1,000 per child to $2,000.

In a previous fact sheet, we explained how the Child Tax Credit works. The CTC as it stands is a tax credit that provides up to $1,000 for households with a child 16 years or younger. In 2015, 49,050 Montana families claimed the Additional Child Tax Credit (ACTC), which is the refundable portion of the CTC. This means that if the value of the CTC exceeds the amount of federal income tax a family owes, the family may receive part or all of the difference in the form of a refund check.

The CTC is an effective way to lift children and families out of poverty. This credit frees up additional income that working families need to make ends meet. CTC helps families achieve that goal by supplementing wages when parents’ do not earn enough to meet basic needs, like paying the rent, putting food on the table, and buying diapers or a winter coat for their children.

The final GOP tax bill would increase the maximum Child Tax Credit (CTC) from the current $1,000 to $2,000 per child under age 17 – up from $1,650 in the prior Senate version — with $1,400 of that refundable, but low-income working families would largely miss out on this expansion.

While doing virtually nothing to strengthen the CTC for the lowest-income working families, the plan calls for raising the income level for CTC eligibility, thereby making the credit available to families earning six-figure incomes. Under the final tax plan, filers may claim the full credit to $200,000 for single parents, up from $75,000 today; and to $400,000 for married couples, up from $110,000.

These changes mean:

Under the Senate Republicans’ proposal, more than 30 percent of children in working families in almost every state would receive less than the full increase. The CTC changes in the Senate bill will ultimately benefit higher-income households, whereas single parent or two parent families working minimum wage jobs will receive less of the CTC than they currently do.

At every step in the process, House and Senate Republicans have tilted their tax bills against working families. The conference committee should address these inequities, but instead they dole out even bigger tax cuts for the wealthy and corporations.

Congress must ensure that the 31,000 children in low-income families in Montana receive more than just a token $75 or less from the CTC increase. 

Ultimately, the revisions to the CTC does not change the true winners and losers. Low- and middle-income folks, working families with children, and Montanans with health care needs will not benefit if the GOP’s plan to overhaul our tax system becomes law.

Pass-Through Provisions Are Not for Main Street

By now you have heard that the tax bill Congressional Republicans are rushing to get to the President’s desk by Christmas will be a costly new giveaway to the very wealthy and major corporations at the expense of working families in Montana.

Last week we outlined who wins and who loses under the U.S. Senate tax plan. Now we want to dive deeper on the details through a blog series over the next several days.

First up: Pass-Through Provisions Are Not for Montana’s Main Street

Racing to pass a tax bill last week, U.S. Senate Republicans made this bad bill even worse by rushing to include a few provisions that skewed the bill even more toward the rich.

One of the last minute edits sweetened the pot for owners of unincorporated businesses who declare their profits as “pass through” income on their personal tax returns — income from businesses such as partnerships, S corporations, and sole proprietorships that owners claim on their individual tax returns and is now taxed at the same rates as wages and salaries.

The version that passed the Senate Finance Committee would have let business owners deduct 17.4 percent of their pass-through income from their taxable income, meaning that it would be tax free (subject to certain restrictions). That deduction is heavily skewed to the most profitable businesses and wealthiest business owners, who receive a greater share of their income from pass-throughs and enjoy a larger tax break per dollar of deductions since they are in higher tax brackets.

To secure the vote of Senator Steve Daines, GOP leadership agreed to raise the deduction percentage by nearly a third, to 23 percent.

Although Senators Daines claimed that he was trying to help owners of small businesses, the fact is that nationally the richest one per cent of households receives more than half of all pass-through income the economy generates.

Because Montana allows all deductions permitted by federal law, the 23 percent deduction to federal income taxes in the passed Senate bill would be taken out again at the state level. According to the Montana Department of Revenue, this pass-through deduction combined with other changes to income tax, would result in a state revenue loss to $80 million.

While sold as a benefit to Main Street, this revised pass-through provision is a sham. As we have explained before, it does not help Montana’s small business owners. It is just one more give-away to the super wealthy in Montana, it increases pressure on Montana’s already strugging budget, and it leaves the average working family high and dry.

Policy Basics: Taxes in Indian Country Part 2: Tribal Governments

Tribal self-sufficiency and self-government depend upon a tribe’s ability to raise revenue and regulate its territory—and the power to tax plays an essential role in this. These revenue streams help tribes perform government functions and provide essential services to their communities. However, few people understand the nuances of how taxes work in Indian Country. As a result, taxation authority in Indian Country has been one of the most litigated issues between tribes, states, and local governments. Furthermore, there is much misinformation and many missed opportunities for innovative and mutually beneficial inter-governmental collaborations that respect tribal sovereignty.

This is the second in a two-part Policy Basics series on taxes in Indian Country. Part 1 provided a brief overview of the taxes that individual Indians in Montana pay. This report Policy Basics: Taxes in Indian Country Part 2: Tribal Governments focuses on tribal governments and the taxes they pay and assess. It begins by delving into the critical role taxes play in creating a reliable revenue stream that can support government services and operations, as well as encouraging certain behaviors and economic climates through tax incentives and exemptions. This is followed by a review of the state-tribal revenue sharing agreements made between the seven reservation governments and the Montana Departments of Revenue and Transportation. The report concludes with a set of policy recommendations to state and tribal policymakers and agency personnel for maximizing the benefits of revenue sharing for their respective governments.

Read the full report Policy Basics: Taxes in Indian Country Part 2: Tribal Governments.

Policy Basics: Taxes in Indian Country. Part 1 – Individual Tribal Members

Few people understand the nuances of how taxes work in Indian Country. As a result, taxation authority in Indian Country has been one of the most litigated issues between tribes, states, and local governments. Furthermore, there is much misinformation and many missed opportunities for innovative and mutually beneficial inter-governmental collaborations that respect tribal sovereignty. 

This is the first in a series of MBPC Policy Basics reports on taxes in Indian Country. This report provides a brief overview of the taxes that individual Indians in Montana pay. Part 2 will focus on tribal governments and the taxes they pay and assess. Part 2 reviews the state-tribal revenue sharing agreements made between the seven reservation governments and the Montana Departments of Revenue and Transportation

Here is the full report – Policy Basics: Taxes in Indian Country. Part 1 – Individual Tribal Members.

142,000 Montanans Face Uncertainty of Health Coverage With Threat of ACA Repeal

Through access to health coverage under the Affordable Care Act (ACA), Montana’s uninsured rate has dropped from
chart-2-repeal20% in 2012 to 7.4% in 2016, with thousands of Montanans accessing health coverage through the health marketplace. Congress and President-elect Trump, however, have stated their intent to repeal the ACA in early 2017, without simultaneously putting in place any replacement. This effort could have disastrous impacts on Montana, leading to 142,000 fewer Montanans with health coverage than if health reform were left in place. At the greatest risk are the over 61,000 Montanans who gained access to affordable health care coverage through Montana’s Medicaid expansion plan.

In the past six years, 12.8 million Americans have gained access to health care coverage. Repealing the ACA without including a clear replacement that ensures continued access to care poses a significant threat to the economy, and creates uncertainty for millions of Americans.

Read our full report 142,000 Montanans Face Uncertainty of Health Coverage with Threat of Affordable Care Act Repeal.


State Budget Handbook for Indian Country

Through the state budget, we as Montanans identify, prioritize, and fund the public services we all rely on for our safety, prosperity, and stability. Our state budget can be used to promote future economic prosperity and health through investments that create opportunities for American Indians and all Montana’s residents, but this is only possible with substantial input and advocacy from Indian Country.

While the federal budget plays a significant role in relieving poverty, promoting health, and building economic opportunity, the state budget also has a substantial impact on the lives of American Indians living on and off reservations in Montana.

This State-Tribal Budget Handbook serves as an overview of how the state budgeting process works and how American Indians can get involved. Section 1 summarizes the history of state and tribal government relationships surrounding the state budget and explores why there is significant room for growth. Section 2 provides a summary of Indian Country’s economic contributions to the state. It also reviews how the state budget impacts tribes, including a list of critical services funded through state investment. Section 3 provides a detailed timeline of the budgeting and legislative processes in Montana. This is followed by an overview of how a bill becomes law, and how to track legislative activity online. Section 4 provides outlines strategies for tribal leaders and engaged citizens to influence the process. Finally, Section 5 provides a directory of related contacts within and outside state government.

View the full document Taking a Seat at the Table: State Budget Handbook for Indian Country.


Medicaid Expansion in Indian Country: Effective Strategies for Outreach and Enrollment

The goal of SB 405, known as the Montana Health and Economic Livelihood Partnership (HELP) Act of 2015, was to extend health care coverage to more than 70,000 uninsured Montanans, nearly a third of which were American Indian. As a result of the expansion, American Indians making less than 138 percent of the federal poverty level can now access a comprehensive range of health care services at locations across the state without any form of cost-sharing. Not only does this have the potential to begin closing the staggering American Indian health disparities gap, but it also allows the state Medicaid program to recoup 100 percent of the cost of all Medicaid services provided through an Indian Health Service (IHS) or tribal facility.

The state and enrollment assisters continue efforts to reach, inform, and enroll eligible American Indians. In order to ensure success, it is important for those engaged in these efforts to understand the intricacies of how American Indians access health care. For example, knowing that American Indians have historically tended not to have health insurance, relying instead on IHS, helps explain why American Indians may be less inclined to explore other coverage options. Additionally, understanding the historical and contemporary basis of IHS and being able to articulate the precise benefits of having Medicaid coverage are also necessary for ensuring the success of outreach and enrollment efforts. Finally, it is important to understand the barriers the eligible demographic faces in accessing information and completing the enrollment process.

See the full report here.

Helping People Balance Work and Family: It’s Within Montana’s Reach

Almost every employee experiences a temporary or extended illness, the birth of a child, or caregiving responsibilities for a sick family member, forcing the employee to take time off from work. However, the United States remains the only industrialized economy in the world that does not guarantee paid leave for new mothers or a paid sick leave standard, and one of a handful that does not guarantee leave for new fathers. While the Family and Medical Leave Act (FMLA) of 1993 was a necessary first step in helping individuals balance work and family demands, the law only guarantees unpaid leave and covers only those employees working full-time and for large employers. This policy leaves many working Americans without coverage and puts those taking unpaid leave at financial risk. As a result, states have started to enact their own family and medical leave policies. Today, three states, California, New Jersey, and Rhode Island, provide businesses and employees access to paid family and medical leave programs. Additionally, in 2015, twenty-three states and the District of Columbia introduced one or more paid leave proposals during legislative sessions in 2015.

In the last of our three-part report series on paid leave, we propose a family and medical leave policy for the state of Montana. The Montana policy would establish a self-funded insurance program administered by the state, ensuring that nearly every Montana worker receives access to paid leave when he or she needs time off for family or medical reasons. The policy’s benefit structure will ensure that the program is a viable option for low-wage workers. Through the use of a similar benefit and contribution structure as unemployment insurance, the state can minimize administrative costs. Finally, as a statewide insurance program, it would be an affordable solution for both workers and employers.

Read our full report Helping People Balance Work and Family: It’s Within Montana’s Reach.

Investing in Montana’s Working Families: A Montana Earned Income Tax Credit

In Montana, thousands of families struggle to make ends meet. One of the most promising policy opportunities to support working families and boost our economy is the enactment of a state Earned Income Tax Credit (EITC). The Great Recession and other economic trends made it harder for Montana’s families to live above the poverty line. In fact, Montana has over 27,000 families that are working but are below or near the poverty line. A sluggish economic recovery increased the struggles for low-income families. In addition, the Montana income tax system taxes families at an annual income far below the poverty line, pushing them further into poverty. The federal EITC program has been the most effective anti-poverty program in history, and a state-level credit could provide the same benefits to Montana families.

>>>Read our full report on the Earned Income Tax Credit and how it could help working Montana families.