Viewpoint: Why I (Democrat) voted no on GOP tax bills

Rep. Karlen

In his 1985 address to the nation, President Ronald Reagan proclaimed that our tax code “... must promote opportunity, lift up the weak, strengthen the family, and perhaps most importantly it must be rooted in that unique American quality, our special commitment to fairness.”

My commitment to these values is why I couldn’t in good conscience vote for five tax and spending bills that Republicans rushed through the state house yesterday.

Unfortunately for the people of Montana, Republicans ignored fiscally responsible Democratic tax cut proposals and pushed through a billion dollar tax package that does nothing to provide any permanent solutions to the affordability crisis facing the state.

Yesterday’s party line vote made it clear that the political allure of cutting checks to voters is coming at the cost of fiscal responsibility, a prudent investment strategy, and the basic obligation to set aside party affiliation and consider all reasonable proposals before making a decision.

I make decisions based on whether I can confidently explain my vote to the folks I represent – regardless of whether they voted for me. Here’s why I voted no on the Republican tax bills yesterday:

• HB 221 gives a tax handout to investors for their capital gains at a steep cost to hard working Montanans. If passed, Montana’s tax code would tilt further in favor of the wealthy and those whose primary income is from investments rather than wages, social security, or pensions. Why would we subsidize tens of millions of dollars in investment income when employers struggle to find workers, wages fail to keep up with the cost of living, and seniors are being priced out of their homes?

• HB 192 spent half a billion dollars on a one-time income tax rebate. A single parent working two jobs and a millionaire would get the equivalent of $100 per month for one year with no long-term tax relief. The fiscal note on my desk from the Department of Revenue noted a litany of implementation challenges with an unknown cost to the state.

• HB 212 increased the business equipment tax exemption by 330% from $300,000 to $ 1 million. I’m proud to represent a range of large and small businesses that support thousands of Missoula County jobs and serve our community in countless ways. When I meet with these business owners, they tell me about the need for affordable childcare and housing so that they can recruit and retain employees. It’s rare that business owners tell me that spending millions to increase the equipment tax exemption by an additional $700,000 is a better use of the state’s taxpayer dollars.

• HB 222 allows all homeowners to apply for a $500 property tax rebate in 2023 and 2024 – the equivalent of $41 dollars per month for a household. No long-term property tax solution is offered and renters are entirely left out of any relief. As an alternative, I have a property tax bill that offers substantial, long-term property tax relief and provides stability to working families and seniors.

• Under the guise of paying down debt, HB 251 reduces the power of the state to invest in long-term community priorities. Our returns on investment pools are greater than the interest on many of the bonds of our debt. Why would we divert this money to pay off bonds when more money is accrued when invested?

My Democratic colleagues and I have introduced tax legislation that achieves meaningful, long-term property tax relief (HB 280) and a substantial middle-class tax cut (HB 285). This tax relief is coupled with creating the Montana Future Fund.

The fund invests a billion dollars of our budget surplus to spur the development of attainable housing; bolster the availability of affordable childcare; assert Montana as a leader in mental healthcare; save our nursing homes from closure, conserve our wildlife habitat, and more.

My sincere hope is that my Republican colleagues – many of whom have become my friends and are leaders who I have the utmost respect for– will collaborate with Democrats to act on the generational opportunity we have to invest in the future of our state and craft a tax plan that, as President Reagan put it: promotes opportunity, lifts up the weak, strengthens the family, and is rooted in a commitment to fairness.–

Jonathan Karlen represents House District 96 (Missoula, Frenchtown, and Huson) in the Montana Legislature.