Legislative Roundup: Affordable housing, Sales tax, Unions laws, Minimum wage

HELENA-The Montana House of Representatives has passed a bill that would use money from the coal severance tax trust fund to pay for low- and moderate-income housing projects.

House Bill 16, carried by Rep. Dave Fern, D-Whitefish, passed the House on a 71-29 vote and will now move on to the Senate. The bill would allow a loan to be taken from the coal trust fund's investment pool to fund the development of housing originally financed by the U.S. Department of Housing and Urban Development and the United States Department of Agriculture.

In an interview, Fern said when he talked with constituents, he consistently heard about a need for affordable housing. He says the state is making progress.

"I think we've come along way in a pretty short time of recognizing it and putting it into policy," Fern said.

Fern said this bill is similar to one passed in 2011 that provided affordable housing for veterans, and he said it's been a successful program. He added there has only been one default on one of these loans for veterans in the eight years it's been available.

Rep. Kerry White, R-Bozeman, who has been a major advocate for coal country, was originally opposed to the bill. But after working with Fern on changing the program's default process and interest rates, he voted for the proposal.

White said during debate in the House of Representatives last Tuesday that he gets frustrated when coal trust money is invested outside the state.

"This bill specifically invests our natural resource money back into the state of Montana," he said.

Sales Tax Proposal Would Eliminate Some Property Tax

A massive, 426-page bill in front of the Montana Legislature would create a 2.5 percent statewide sales tax while cutting three different types of property tax.

House Bill 300, sponsored by Rep. Kerry White, R-Bozeman, would tax most transactions, including internet sales, with some exceptions, like SNAP-eligible food and medicine.

White said the revenue collected from the tax will go to local governments to fund K-12 schools and infrastructure projects. White also said no money collected from the tax would go into the state general fund.

"I want this money to be focused on infrastructure, health, safety and welfare," he said.

The bill also sets a "tax holiday" between October 20 and November 20. During this period, the tax would be lifted. White said the tax targets tourists, who, he said, will pay 33 percent of tax burden in his bill. The "holiday" sits between summer and winter tourism seasons.

Rep. Mark Noland, R-Bigfork, was the only supporter of the bill during the House Taxation Committee's public hearing Wednesday. He said Montanans are burdened by high property tax and the state tax system is in need of restructuring.

"You will see this is a relief. At first glance, you might say 'no, who wants a sales tax?' And I'm a Republican, why in the world would I support a sales tax?" he said. "However, with the revenue we're going to be bringing in by reducing our property tax, I'm going, 'this is a win.'"

Director of the Department of Revenue Gene Walborn opposed how the bill cuts agricultural, residential, commercial and timberland property tax. He says relying on income and sales tax would create new problems.

"So, we take away one of our most stable tax revenue sources, move to a sales tax, and also rely on an income tax," Walborn said. "Those states that have that type of model, during the great recession, really had fiscal problems."

The bill also completely eliminates the property tax office, which collects the kinds of property taxes that would be cut. White said removing the office would save the state $26 million. Walborn said this would also remove about 200 employees from the Montana Department of Revenue.

Heather O'Loughlin is the co-director of research and development at the Montana Budget and Policy Center, a non-partisan, nonprofit that researches Montana budget, tax and policy issues. She was one of nine opponents to the bill at the hearting, and said a sales tax harms low-income people who spend most of their income on goods and services.

"Montana is still asking those at the bottom to pay a greater share of their income in taxes than those at the top," she said.

The House Taxation Committee did not immediately vote on the bill.

Legislation Proposed to Change Union Laws in Montana

Lawmakers are considering a bill that would change labor laws in Montana, prohibiting unions from charging non-member public employees union dues.

Rep. Brad Tschida, R-Missoula, is sponsoring House Bill 323, which the House Business and Labor Committee advanced to the full House on a 11-8 vote last week.

Tschida referenced the U.S. Supreme Court decision, Janus v. American Federation of State, County and Municipal Employees, in which the court ruled that employees who are not members of a union, but still benefit from a union's collective bargaining, cannot be required to pay fees to the union. The bill characterizes forced payment as a violation of First Amendment rights.

"[The bill] restores employee freedom, it does not strike it down," Tschida said.

Another section of the bill would prohibit unions from having designated registration periods, meaning it would allow a member to join or drop membership any day of the year.

The public hearing for the bill drew one supporter, from the conservative Americans for Prosperity, and 15 opponents.

Lt. Gov. Mike Cooney was first to speak against the bill. He said the state has already made changes to properly address the Janus ruling. He called the bill a threat to workers, saying everyone should pay their fair share for union benefits.

"In summary, this bill just isn't necessary," Cooney said.

President of the Montana Federation of Public Employees, Eric Feaver, also testified in opposition of the bill. He said the union has not collected any fees from non-members since the high court ruled in June.

Feaver also said that having a one month registration and drop period each year for membership is the best business practice, and essential to the union's viability.

The bill was voted out of committee and will move to the House floor for further debate.

Lawmakers in the House Business and Labor Committee voted down a bill that would have raised the state's minimum wage to $15 an hour by 2020.

During the hearing on House Bill 345, the bill's sponsor, Rep. Mary Ann Dunwell, D-Helena, referenced President Donald Trump's State of the Union address, in which he commented that the U.S. economy is experiencing a miracle.

"So many of our workers are left out of that economic miracle," Dunwell said.

The bill applies specifically to non-agriculture workers, and would increase the minimum wage from $8.50 per hour to $12 per hour starting this July, and to $15 the following year.

Dunwell cited an article in the National Journal which stated that today's minimum wage is worth 25 percent less than its value in 1960. While Montana's minimum wage is adjusted based on consumer prices, Dunwell said it does not necessarily account for inflation.

Dunwell told the committee a wage increase would mean a decrease in the cost of safety-net social programs, saving taxpayers money. She also argued the raise would boost employee productivity and reduce turnover.

Judy Bovington, the chief legal counsel for the Montana Department of Labor and Industry, also spoke in support of the bill on behalf of the governor's office. She said 60-65 percent of minimum wage workers are women, half are over the age of 25 and that this bill would affect 16 percent of Montana's workers.

"[The American dream] should mean people who work hard every day are able to take care of their families," Bovington said.

Members from the business community spoke in opposition of the bill.

A lobbyist for the Montana Retail and Restaurant Associations, Brad Griffin, said this bill does not account for service industry workers who get substantial tips. He said the free market is already answering the demand for workers and higher wages, and that it could hurt businesses to pay more.

"We don't have the economic engine to push these wages," Griffin said.

The bill was tabled in committee, so it will not move forward unless it can get 58 votes from the full House of Representatives to move it onto the House floor for debate.

Shaylee Ragar and Tim Pierce are reporters with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Newspaper Association, the Montana Broadcasters Association and the Greater Montana Foundation. Shaylee can be reached at [email protected]. Tim can be reached at [email protected].