Bill would provide tax cuts, credits for employee training
HELENA (UM Legislative News Service) - The House Taxation Committee heard testimony Thursday on a bill that would extend and expand tax cuts to Montana employers that pay for training and education for their employees in certain trades.
Supporters say the Montana Trades Education and Training tax credit – or MTECH – helps address Montana’s labor shortage of skilled trade workers.
Rep. Sue Vinton, R-Yellowstone County, is sponsoring House Bill 245. She says it’s an extension of a program passed in 2021 that has had a high demand since the last session.
The bill would give employers a tax credit to cover 50% of the training costs up to $2,000 per employee yearly. Employers could earn up to $25,000 in tax credits per year.
“It expands the list of eligible trade professions that can take advantage of the tax credit, allowing even more employers to receive an incentive for investing in their employees and in their industries,” Vinton said.
According to the bill’s fiscal note, employers claimed more than $250,000 in credits in 2021. The tax credit was originally passed by the 2021 Legislature but limited what trades were eligible. If passed, HB 245 would add trades like medical and dental assistants, farm laborers, information technology workers and more construction positions. It would also put the program in the lap of the Department of Revenue, giving it the flexibility to add new trades as the economy demands them.
Eleven proponents testified for the bill Thursday. Sarah Swanson is the Director of Strategic Engagement at the Department of Labor and Industry. She said the bill and further investment in the MTECH program is essential to address Montana’s skilled labor shortage.
“Training and upskilling workers from our high school students, and building stackable pathways for stackable credentials and certificates from high school all the way into adulthood, allowing folks to earn while they learn and taking advantage of all of the different opportunities we have to train Montanans,” Swanson said.
No one opposed the bill at the hearing. If signed into law, the MTECH program would be extended through 2028.
According to the Department of Labor, in 2021, Montana’s post-pandemic workforce was 10,000 individuals smaller than it had been before COVID hit, despite Montana’s influx of new out-of-state residents.
Montana’s unemployment rate is low, at only 2.9%, but according to the 2021 data, there are still upwards of 14,000 open positions in Montana. Eugene Graf, a builder in Bozeman, said some Baby Boomers are aging out of their trades, and there’s not enough interest among younger generations to fill the gap.
“The labor force -- it is shrinking. All efforts to encourage entry into the trades as a productive livelihood is admirable,” Graf said.
The committee did not take immediate action on the bill.
Elinor Smith is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association, and the Greater Montana Foundation.