Tax Compliance for Out-of-Staters: A No-Brainer

By Molly Severtson
Interim Director
The Policy Institute

This morning The Policy Institute testified at the House Taxation Committee in support of House Bill 222 sponsored by Rep. Dick Barrett (D-Missoula). The bill would create the "Montana Real Estate Backup Withholding Act," which would help bring into tax compliance out-of-staters who sell property in Montana. Currently 36% of non-residents who should be paying this tax are paying it, while just 4% of Montanans who owe it are not compliant. The bottom line? There is no reason for the legislature to not pass this bill.

The Policy Institute believes that people who buy and sell land in Montana benefit from our social infrastructure and therefore have a responsibility to help maintain it.

With education, health and human services and other public service budgets being slashed this session, it would be irresponsible for the legislature to let this non-compliance by non-residents continue to happen.

UPDATE: A Billings Gazette story on the hearing.

SB 104 - A Bad Idea for Energy-Efficiency and for Montana

By Molly Severtson
Interim Director
The Policy Institute

Tomorrow, January 13, 2011, the Senate Energy and Telecommunications Committee will consider Senate Bill 104, sponsored by Sen. Jason Priest (R-Red Lodge). The bill would limit the Public Service Commission's ability to implement inverted block rate structures for electrical services. I will be there to testify before the committee in favor generally of inverted block rate structures as a concept, and specifically in opposition to Senate Bill 104.

Inverted block rate structures are cost structures in which each additional block or unit of energy above a given level is charged at a higher rate than preceding blocks. In short, the less energy you use, the less per unit you pay for that energy. Inversely, the more energy you use, the more per unit you pay for that energy.

As Montana moves forward into an uncertain energy future, it’s important to remember that energy conservation is the lowest-cost energy to which we have access. Inverted block rates create both an incentive and a reward for all consumers for reducing energy usage. In addition, increased conservation means less need to purchase power in the market or to build new power plants in the future, benefitting consumers in the long term.

Republicans are expected to argue that inverted block rate structures will disproportionately affect low-income Montanans, as their homes are often older and less energy-efficient, and they're less able to make energy-efficiency upgrades to their houses or apartments. Saying nothing of the hypocrisy of this position as Republicans just made more than 250 budgetary cuts (many of them in the social services arena) in a procedural trick, it is important to remember that Northwestern Energy’s inverted block rate structure is of benefit to 75-80% of their residential customers. Also, for every low-income household this affects negatively, there are many more high-end “McMansions” in Montana that will be affected. In addition, energy assistance programs will still be available to low-income folks who are negatively affected by the structure.

Finally, and perhaps more to the point, rate-making is an extremely complex arena and is something in which the legislature should not even be involved.

For these reasons, The Policy Institute opposes SB104. I urge you to do the same by attending the hearing, or contacting the legislators on the Senate Energy and Telecommunications Committee.

UPDATE: A Missoulian story on the hearing.

Part of the Message from Employers to Lawmakers: Government Can and Should Do Good

By Molly Severtson
Interim Director
The Policy Institute

I'm guessing that the Jobs Listening Session, held Saturday at the Montana Legislature, didn't turn out exactly as the Republicans who planned it had expected. The session was designed to, according to President of the Senate Sen. Jim Peterson (R-Buffalo),"create an opportunity for private-sector Montana employers to come tell us what we can do to help put Montana back to work."

Speaker of the House Mike Milburn's (R-Cascade) description of the intent of the meeting was more to the point: "We are hoping ...employers... give us ideas of what burdensome laws, regulations or tax policies need to be changed or repealed so that these private employers can create opportunity for unemployed Montanans to rejoin the workforce."

I spent the morning in the session designed for Construction and Energy employers. While many of those who spoke gave the expected responses - "cut the red tape, get government out of our way, etc.," - a surprising number of those who spoke said just the opposite.

Mike Dowling, an architect from Helena, urged lawmakers to keep investing in state-financed building projects, Robert Morrison of the engineering firm Morrison-Maierle highlighted the need for public investment in Montana's infrastructure as an important component of a healthy economy and Matt Warner of WTR Consulting Engineers said that a strong infrastructure is, "key to our quality of life in Montana."

Twitter was lighting up with those surprised and pleased by this turn of events, and while House Majority Leader Rep. Tom MGillvray (R-Billings) tweeted, "Business days at capitol: most common concern was worker comp costs and business equipment tax in group I attended," I hope that he and other Republicans heard the other message as well: Government can and should do good when thinking about job creation in Montana.

Another note: During the planning of the meeting, Senate Minority Leader Sen. Carol Williams (D-Missoula), along with House Minority Leader Rep. Jon Sesso (D-Butte), had to urge their Republican counterparts to include nonprofit organizations in the session. "We just told them it had to be a broad diverse discussion and have nonprofits as well as for-profits to be able to have a voice," said Sen. Williams.

Just one nonprofit representative spoke at the session I attended, Kathy Hadley of National Center for Appropriate Technology (NCAT) in Butte. Perhaps illustrative of a general misunderstanding of nonprofits, NCAT was listed as a "quasi-governmental" organization on the meeting agenda, a point which Ms. Hadley corrected during her testimony.

Procedural Trick Reduces Transparency of the Legislative Process

By Molly Severtson
Interim Director
The Policy Institute

Early next week, Montana legislators will consider a recommendation from the Legislative Finance Committee to start making budget decisions at 5% below the adjusted base budget, meaning that more than 250 cuts to the Governor's budget will be made automatically in a simple procedural decision without public scrutiny. If you care about Montana's families, businesses and vulnerable children, contact your legislators today to urge them to make these important budget decisions in the light of day.

Learn more here.