Legislative Update: May 7, 2015

Here is a quick summary of the issues impacting Montana’s independent banks during the final days of the legislative session.

  • Morrow Bills: As expected, SB 280 and 281 were summarily vetoed by the Governor.
  • Tax relief: The Governor vetoed today the final tax relief bill sent to him this session.   The bill was SB 171.  Here is a write-up of the bill from the Chamber

SB 171 accomplishes the following goals to simplify our income tax code while also offering modest tax relief:

  • Provides much needed simplification to Montana income taxes by starting the calculation with federal taxable income.
  • By starting with federal taxable income, Montanans would receive a higher personal exemption and standard deduction which especially benefits those in lower tax brackets.
  • Reduces the current 50 or so different additions and subtractions to a relative few in calculating Montana taxable income.
  • Eliminates a number of tax credits.
  • Provides a $15 million per year income tax cut by adopting two tax rates – 4.7% and 6.1%.
  • Adopts separate tax brackets for single taxpayers, head of household, and married filing jointly taxpayers.
  • Adds a definition of head of household and adopts tax brackets to benefit those taxpayers.
  • Provides a transition for carry forward credits.

A copy of the veto article is linked here.

With the veto of SB 171, Governor Bullock vetoed every piece of tax relief legislation passed by the 2015 Montana legislature.

  • The bonding/government projects bill: As you probably read in the newspapers, the Montana House killed the final government projects spending bill on the last day of the 2015 legislation session.  That bill was SB 416. Under the Montana Constitution, if a bill obligates the state to a debt, such as a bond, that requires passage by 2/3rds of the legislature.  Thus, 67 votes were needed in the House to pass the much scaled down version of the infrastructure bill. The bill had been scaled back to $150 million. A number of the House Republicans who opposed SB416 said they didn’t like the priorities in the bill, noting that it included $40 million for just two projects, $25 million for a new Montana Historical Society museum in Helena and $18.4 million to renovate Romney Hall on the Montana State University campus in Bozeman.
  • HB 2 – the spending bill: The Governor on the 5th both signed into law and line-item vetoed HB 2, the general funding spending bill.  This link goes to the Governor’s line-item veto explanation letter.  The legislature will now have the opportunity to overturn the line-itemed portion of the bill if it so chooses.

Overall, the session was a fair to middling one for Montana’s community bankers.

  • We were able to defeat the state farm bill once again
  • However, the Governor vetoed the industry’s two major bills, SB 281 and 280
  • But, those vetoes were tempered by the fact that the industry was able to modify a number of bills to make them either palatable or beneficial to the industry.
  • It is a bit disappointing that the Legislature did not pass an infrastructure bill.