HELENA (MTN News) - State leaders are expecting a budget surplus of well over $1 billion when the Montana Legislature begins its 2023 session. Majority Republicans have talked about a goal of “giving the surplus back” to the public, but not all lawmakers are on the same page about the best way to do that.

Last week, Rep. Brad Tschida, R-Missoula, and Republican House candidate Lyn Hellegaard, who is running to fill Tschida’s seat, put out an opinion piece published by Lee Newspapers.

In it, they called for a special legislative session to consider an immediate income tax rebate before the end of the year.

“Isn’t the return of your money to your bank account for your chosen use a better practice than having the State squander it expanding government programs, which permanently raises your taxes?” they said in the piece. “We believe you deserve to get back what you overpaid in income taxes to the State and that’s exactly what the average taxpayer in Montana expects from their elected representatives.”

Their proposal would return up to $3,000 to taxpayers, based on how much they paid in state income tax over the last two years. Those who paid in less than $3,000 would receive back only what they paid.

A special session can be held if the governor calls lawmakers back in, or if a majority of lawmakers vote to hold one. Tschida told MTN he saw both as options, but his preference would be for Gov. Greg Gianforte to make the call, since that has typically been how previous special sessions were called. He said his proposal would fit with Gianforte’s “Montana Comeback Plan,” which called for using surpluses to reduce taxes.

In online posts last week, Tschida and several other lawmakers encouraged the public to contact the governor’s office in support of a special session and tax rebate.

However, not all Republicans in the Legislature are in favor of the proposal. On Friday, House Appropriations Committee chair Rep. Llew Jones, R-Conrad, put out his own opinion piece in the newspapers, in which he argued federal budget stimulus has contributed to the current high inflation rates, and a direct income tax rebate would similarly be “inflationary.”

Jones said he supported returning money to taxpayers but preferred to do it by reducing the state’s liabilities and making investments that could benefit taxes in the long term. Some of his suggestions included investing in a regional mental health model to address the crisis at the Montana State Hospital, making temporary property tax reductions, paying off state debt and filling emergency and reserve funds.

Jones also argued an early session wasn’t the best time to decide what to do with the budget surplus.

“I have been to any number of special sessions, and I just don’t find the hothouse, intensely partisan environment of a special session the place for throwing thoughtful deliberations,” he told MTN. “To me, special sessions are about dealing with emergencies. We’re six months from a session; we can address this issue in a much more thoughtful, deliberate manner if we have time and public input.”

MTN contacted Gov. Gianforte’s office for a response to the calls for a special session on tax rebates. They shared a statement from Ryan Osmundson, the governor’s budget director.

"The governor firmly believes hardworking Montanans should keep more of what they earn, and he has prioritized permanent tax relief since day one,” Osmundson said. “With a budget surplus and with Montanans feeling the pain of rising prices and inflation we haven't seen in nearly two generations, we're committed to providing Montanans with permanent tax relief with a fiscally responsible budget."

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