HELENA — Home health-care workers and others on Monday endorsed a Bullock administration bill to temporarily raise the state taxes on accommodations and rental cars, while some business groups opposed it.
At issue before a joint meeting of the Senate-House Taxation committees was Senate Bill 6, by Sen. Dick Barrett, D-Missoula. No immediate action was taken.
Barrett’s bill would raise the tax on accommodations such as hotel, motel and campground lodging to 10 percent from the current 7 percent starting in January 2018 and reverting to 7 percent in January 2020.
The rental tax bill would rise to 10 percent from the current 4 percent and revert to 4 percent in January 2020.
The bill would raise $20.9 million in new revenue and is part of Democratic Gov. Steve Bullock’s plan to fill a $227 million budget and revenue hole.
Bullock has called for about $75 million in tax increases, $75 million in budget cuts and $75 million in budget transfers.
Barrett said the governor would have to make $227 million in budget cuts if the special legislative session doesn’t approve what Bullock is proposing. The cuts, he said, “would have an absolutely draconian effect.”
State Revenue Director Mike Kadas said raising the accommodations tax to 10 percent would put Montana near the middle of what other states are charging.
“When you make your vacation plans, do you consider the lodging tax?” Kadas asked. “Do lodging taxes even enter your mind? Don’t think so.”
If so, Montana would have a large administration, he said, because the state doesn’t have a general sales tax.
Kadas cited a study that showed 70 percent of accommodations taxes and 80 percent of rental car taxes are paid by out-of-state residents, claims that industry representatives disputed.
Celeste Thompson, a Missoula caregiver for elderly and disabled people, said the people she cares for count on her making them meals, getting them to the bathroom and helping them shower.
The budget cuts, if not reduced, would mean these Montanans would have to get by with fewer services.
“One client is in her 30s and with skin disease and chronic pain,” Thompson said. “If my hours get cut, I’m worried she would fall and get hurt. For their sake, please raise revenue.”
Ronald Hooper, CEO of Neptune Aviation in Missoula whose company’s planes and staff fight wildfires, supported the bill. Part of the state potential deficit is to replenish its drained wildfire fighting fund.
“While fire costs should be covered, I don’t believe they should be covered at the expense of children, the disabled and families,” he said.
In opposing the bill, some industry representatives conceded that the state had a fiscal problem and said they were willing to support increases in both taxes by 1 percentage point, but opposed the increases in SB6.
“We recognize that we have a need for revenue, no question about that,” said Riley Johnson, representing Enterprise Rent-A-Car. “To put on two industries, specifically a 150 percent increase in rental car taxes and a 100 percent increase in accommodations taxes, is singling out just two industries to pay the bill.”
For Enterprise, he said, 60 percent of its customers are from Montana, with state government being its largest Montana customer.
Dan Brooks of the Billings Chamber of Commerce said he staunchly opposed the bill.
“Our opposition stems from the narrow targeting of the rental car and the tourism industry,” he said.
Brooks said the chamber supports a 1 percent increase in the rental car and accommodations taxes.
The 33rd special legislative session in Montana history will officially open Tuesday, although some committees met Monday.
The Senate floor session is scheduled to start at 11 a.m., while the House is set to convene at noon.
Democratic Gov. Steve Bullock called the special session to fill a $227 million budget and revenue gap. His proposals are being introduced as bills.
Republicans, who have majorities in the Senate and House, officially expanded the session Friday to include some their proposals.
For a list of committee meetings being broadcast on the internet or community access television stations, check the schedule at www.leg.mt.gov.
To leave messages for legislators on bills, call 1-406-444-4800.