Reports
What Health Reform Means for Montana
Each year, over 150,000 Montanans struggle to provide health insurance coverage for their families. For thousands more, the cost of health insurance is making it harder and harder to meet their families’ other basic needs.
The health reform package recently passed by Congress may not solve all of our health care system’s underlying problems, but it will bring coverage to thousands of Montana families who had been living without access to affordable health care, at relatively low cost to the state of Montana.
This edition of the State of Working Montana explains how health reform will improve access to care in Montana. While we do not cover every provision included in the bill, we have kept a sharp focus on how the bill improves affordability of insurance and access to coverage for the uninsured.
Capital Gains Reform Will Strengthen Montana
In 2003, the Montana legislature passed a capital gains credit that benefits a very narrow part of our population, at the expense of public programs from education to health care. Montana is one of just nine states offering a significant tax break for capital gains income.
This report explains how the capital gains credit is costing Montana valuable revenue, and why we need funding for our public structures more than ever.
Montana Can Bypass a Costly and Ineffective Federal Tax Break for Corporations
Like most other states, Montana’s revenue has been dropping dramatically
over the past year. A little-known contributor to the declining revenue
is a federal corporate tax break that is hurting our revenue stream and
was never approved by the Montana legislature.
This report
explains the impacts of the Domestic Production Credit, and shows how
its elimination will help Montana solve its revenue crisis.
How the Recovery Act Benefits Montana
The American Recovery and Reinvestment Act passed by Congress last year did a lot to jumpstart growth in Montana. Jobs, services, and investment have stayed afloat thanks to this crucial piece of legislation. It's hard to imagine how much worse things would have been without the stimulus package.
This report details how the ARRA kept people working, services functioning, and money flowing due to its injection of spending into our economy.
The State of Working Montana in 2009
The Montana economy has experienced a lot of turmoil over the last two years. Across the state, the quantity and quality of jobs has declined thanks to lay-offs, reduced pay, and other effects of the global economic crisis.
A new report from the Montana Budget and Policy Center examines the impacts of the economic downturn on our state, finds that many lack the opportunity to create a better future for their families, and outlines potential pathways to a more prosperous future for all Montanans.
Download the report at the link below.
Emergency Spending Cuts Can Be Minimized and Targeted to Avoid Further Harm to Economy and Montanans
Because of declining state revenue, Governor Schweitzer will be required to make emergency cuts to state spending. According to a new MBPC report, cuts can be limited to approximately $31 million, compared to the $47 million in reductions government agencies have analyzed. The report outlines recommendations designed to protect the already struggling state economy and Montana families working hard to make ends meet.
The 2011 Biennium Budget: Maintenance, Recovery, and Future Cuts
The 61st Legislature faced the unenviable challenge of balancing the budget during a time of economic downturn and extreme revenue uncertainty. Despite a large influx of federal recovery act funding, some of the decisions made by the legislature may lead to cuts in vital programs like education and healthcare, either now or in the future. Many of the cuts are slated for the 2013 Biennium (July 1, 2011 to June 30, 2013) and need not occur if the 62nd Legislature is willing to fill holes created by decisions of the 61st Legislature.
Montana Economists Join Hundreds across the Nation in Urging States to Maintain Public Services
Six Montana economists have joined over 200 economists from 38 states in signing a letter urging state governments to “maintain the public services that are critical to the health of the economy and the well-being of working families,” because “cutbacks at this time would further slow the economy and harm those already hardest hit by the downturn."
New Census Data Shows 175,621 Montanans without Health Insurance Coverage in 2008
New U.S. Census Bureau data shows that 175,621 Montanans, or 18.5% of the population, lacked health insurance coverage in 2008. That number would be significantly higher without public health care options such as Medicare, Medicaid, and Children's Health Insurance. An additional 234,834 Montanans, or 24.7% of the population, were covered by public health insurance. The number of uninsured for 2009 will likely be much worse because we are now deeper into the recession.
Restoring Revenue and Fairness: A New Top Marginal Rate for Taxable Income
House Bill
395 (2009) attempted to restore some of the state revenue lost as a result of SB 407 (2003). SB 407 provided a variety of tax cuts to Montanans, but the highest-income Montanans have received most of the benefits from those cuts, and the
costs to the state were far higher than anticipated. HB 395 would restore
some of the revenue lost as a result of SB 407 by creating a new top tax bracket on households earning more than $250,000 per year. HB 395 would also restore some of the progressivity of the Montana income tax system and affect less than 1% of all Montanans.
The Business Equipment Tax in Context
During times of economic downturn and revenue uncertainty, any proposals for decreasing revenue (i.e. cutting taxes) must be carefully scrutinized. One of the only new tax cuts being seriously considered during the 2009 Legislative Session is a reduction in the business equipment tax. The effective tax rate on business equipment has already been reduced dramatically over the last decade; further decreases during an economic downturn will mean decreased revenue to the state and reduced funding for other spending priorities or tax cuts that could have a greater impact on both average Montana families and the economy.
Federal Stimulus Funding Available to Montana Tribes
The $787 billion American Recovery and Reinvestment Act of 2009 (ARRA) provides many funding opportunities for tribal governments. Some of these opportunities are contained in Montana’s House Bill 645, the state appropriation of federal stimulus dollars.This brief outlines some of the funding opportunities for tribal governments in HB 645. It also outlines significant funding sources in ARRA that may be allocated directly from the federal government to Montana tribes, primarily through grant applications.
Dispelling Myths and Misconceptions about State Government, the Budget, and Federal Stimulus Dollars during a Recession
The Montana Budget and Policy Center addresses some common misconceptions surrounding appropriate use of stimulus dollars during the recession.
Senate Bill 407 did not Expand the Economy
Senate Bill 407, passed in 2003, lowered the top tax rate for the personal income tax and created a credit for capital gains, effectively lowering the capital gains rate. At the time, proponents argued that these changes would spur economic growth in Montana. However, there is no evidence that SB 407 created additional growth in Montana’s economy.
Ending Preferential Treatment of Capital Gains Income
Ending preferential treatment for capital gains income will offer fiscal security for Montana while restoring some of the progressivity of the Montana income tax system. Furthermore, extensive research shows that there is little connection between lower taxes on capital gains and higher economic growth, either in the short run or the long run.
Summary of Recovery and Reinvestment in Montana
The American Recovery and Reinvestment Act of 2009 provides extensive relief to states, local governments, and individuals suffering from the current economic downturn. This brief outlines general principles to consider when allocating the funds, and provides information on the core components of the act with the greatest potential for providing relief to low- and moderate-income Montanans.
Targeted Property Tax Relief
The Montana Department of Revenue is completing the most recent reappraisal of property values in the state. Based on the most current estimates provided by the Department, the appraisals are likely to result in a statewide average increase of approximately 56% in residential home values and 51% in commercial property. The Governor and leadership of both parties have expressed a commitment to keeping property tax revenue neutral as a result of the reappraisals and to mitigate the effects of increased property values on taxpayers. Efforts should be taken to ensure that any proposed property tax mitigation is targeted effectively towards those individuals and families least able to pay increased property taxes, namely those who pay an unduly high share of their income in property taxes.
Investing in Montana's Working Families: A Montana Earned Income Tax Credit
A state Earned Income Tax Credit would help Montana's working families, who are struggling to make ends meet despite their hard work. Economic trends have made it harder for working families to live above the poverty line. Montana currently has over 16,000 families that are working but still live in poverty. The current economic crisis will only increase the struggles for these low-income families. Unfortunately, Montana’s income tax system drives many poor working families deeper into poverty. A state EITC would help ameliorate this effect on low-income taxpayers.