New State Budget Proposed by Governor
Last week, Governor Greg Gianforte released his proposed budget for state government for the 2023 biennium.
The plan would fulfill many of the policy priorities he outlined in his “Montana Comeback Plan” with the priorities of getting the economy going again, safely opening businesses, and getting Montanans back to work.
The budget provides $50 million in broad-based and targeted tax relief, including cutting the top marginal income tax rate to 6.75%. In 2019, Montanans who earned a taxable income of more than $18,400 paid the top marginal rate of 6.9%.
“This roadmap to the Montana comeback will help unlock our state’s full, outstanding potential,” Gianforte said.
He highlighted efforts to control state spending, saying, “I promised we would hold the line on new general fund spending. This budget does. After a decade of out-of-control spending, this budget brings fiscal responsibility back to state government while providing essential services.”
The governor’s budget also relieves 4,000 small businesses from the burden of the business equipment tax by raising the exemption from $100,000 to $200,000. The business equipment tax is a unique Montana tax that requires businesses to pay taxes on equipment, supplies and tools used in the production and operation of the business.
Gianforte’s budget boosts funding by 25 percent for programs providing property tax relief to low-income homeowners, including disabled veterans and seniors.
To combat the drug epidemic, the Gianforte budget devotes marijuana tax revenue and part of the tobacco tax settlement to the HEART Fund, or the Healing and Ending Addiction through Recovery and Treatment Fund. It will fund a full continuum of substance abuse prevention and treatment programs for communities. With $7 million in new fund and a federal match, the governor’s budget invests an additional $23.5 million per year in substance abuse prevention and treatment programs.
The governor proposes a $1 million investment in trades education by providing a credit for employee education and training.
Gianforte’s budget also provides $2.5 million of incentives to raise the pay of Montana’s starting teachers. Montana ranks last in the country in starting teacher pay.
Gianforte noted that, even with statutory required spending and investments in combating the drug epidemic, increasing starting teacher pay, and expanding trades education, total general fund spending increases less than one percent per year.