Winning Ugly

When the 2009 Legislature convenes on Monday, January 5, 2009, fourteen new members of the Montana Senate will be sworn in. 7 Democrats and 7 Republicans.

Seven new Republican faces and what they stand for include:

1. Ryan Zinke (Whitefish) http://zinkeforsenate.com/
2. Bruce Tutvedt (Kalispell) http://brucetutvedt.com/
3. Greg Hinkle (Thompson Falls) http://www.campaignsitebuilder.com/templates/displayfiles/tmpl69.asp?SiteID=2317&PageID=42960&Trial=false
4. Rick Ripley (Wolf Creek) http://www.greatfallstribune.com/apps/pbcs.dll/article?AID=2008810060311
5. John Brenden (Scobey) http://brendenforsenate.com/
6. Taylor Brown (Billings) http://www.votetaylorbrown.com/about_taylor.html
7. Debby Barrett (Dillon).

Four have no legislative experience of any kind. Brenden served briefly to fill out the term of Sen. Dennis Nathe, who died in office. Barret and Ripley move over from the House.

Nice people. The kind you would want to have as neighbors.

So far, everything seems fairly benign.

So, just exactly what do these folks want to do?

Permanent property tax relief. Eliminate the business equipment tax. Reduce state spending and the size of state government.

Streamline permitting for natural resources and projects. Stop frivolous lawsuits against industrial-strength projects.

Dig more coal. Drill more oil. In other words, “extract more of our natural resources. But, we’ll be careful doing it. Trust us. And, we’ll make certain Montanans benefit. Really.”

Really?

How?

With an equal number of Republicans and Democrats in the House, the Senate will have additional leverage if it chooses to wield it.

In every session, the Senate has the upper hand, primarily because it has the final word on the budget, the only action the Legislature is charged to perform under the constitution.

In devising plans to eliminate the business equipment tax altogether [either all at once or by phasing it out], there are several questions that should be asked:

1. Will the Legislature offset the loss of $80.0 million in property tax revenues for school districts, county governments and the University System with state monies?

2. If the answer is yes, will it (a) reduce general spending by that amount [and where?] or (b) simply reduce the projected $250.0 million general fund surplus in the executive budget by the same amount?

3. If the answer is no, how will school districts and county governments in particular cope with the loss of revenues?

4. In eliminating the business equipment tax, will the Legislature be forced to also eliminate or reduce the same type of property taxes paid by centrally assessed taxpayers? If the answer is yes, add another $100.0 million to the price tag.

The state seems be emerging from an extended period (1993 through 2003) where the Legislature systematically underfunded schools. Since 2005, the Legislature has attempted to respond to the deficiencies identified in the so-called 'Sherlock decision.' If actions by the Legislature result in a massive loss of revenue from property taxes paid previously by businesses to schools, will the state be setting itself up for additional litigation? Or weakening its position in ongoing litigation?

As Ross Perot would say, "OK. Now here's the deal." During the hey day of property tax cuts in 1997 and 1999, the burden of property taxes was shifted from large corporations and businesses onto small businesses and homeowners. Depending on how the proposals for the 2009 session are structured, schools will shorted revenues or property taxes paid by homeowners and small businesses will increase.

If the sponsors choose to spend state money to offset the revenue losses, state spending could actually increase above the levels proposed by the executive.

Should be fun to watch the debate.

And, yes. The Governor can always veto bills of these types.

Trying to determine who has the upper hand should make for good theater.