Montana's land board in jeopardy

[Nemont]

A consumption tax of 4% is a much lower tax rate than the 6.9% or whatever the top tax bracket is for income tax. YOu also reduce the pool of revenue to draw taxes from. Wyoming is a good example of what happens in a bust with a sales tax approach - they're going through massive layoffs, drastic budget cuts and will likely need to raid their rainy day fund to make up the budget shortfall due to commodity prices free-falling.

In the context of the Gov's race, Gianforte in 2002 was advocating replacing income tax with that, which would lead to a big tax cut for the wealthy. Now he's erroneously claiming that he never advocated for a sales tax at all. While it is election year rhetoric, it clearly moves the needle on + & - for candidates.

Regardless, I do think that the local option sales tax is a much better approach than the statewide sales tax and it's a true example of local control. It would allow specific communities to target tourists to help pay for basic municipal needs like water, sewer, infrastructure, etc while being administered at a level much closer to home than Helena. Communities already have this option, yet many don't exercise it.

A community has to be big enough, located in the correct area and have the ability to administer, collect and police a local option tax. If the community is small, located in say northern Valley County there is zero chance a local option tax is viable. Yet those same citizens are taxed by the State to help provide infrastructure, maintenance and construct facilities used by tourist who pay very, very little.

Wyoming's woes are more than just a result of a sales tax receipt slow down. Go look at their revenue and it shows that the killer is the oil/gas sector severance tax decline and their investment income in a zero interest environment has decline more than then their sales tax revenue.

I don't see a sales tax ever passing in Montana but it is not because it isn't good tax policy or good public policy, it is because we are stupid in the things we tax and the things we don't.

A local option tax is okay if you are in Whitefish, if you are in Scobey, not so much.

Nemont

 

[Ben Lamb]

A community has to be big enough, located in the correct area and have the ability to administer, collect and police a local option tax. If the community is small, located in say northern Valley County there is zero chance a local option tax is viable. Yet those same citizens are taxed by the State to help provide infrastructure, maintenance and construct facilities used by tourist who pay very, very little.

Wyoming's woes are more than just a result of a sales tax receipt slow down. Go look at their revenue and it shows that the killer is the oil/gas sector severance tax decline and their investment income in a zero interest environment has decline more than then their sales tax revenue.

I don't see a sales tax ever passing in Montana but it is not because it isn't good tax policy or good public policy, it is because we are stupid in the things we tax and the things we don't.

A local option tax is okay if you are in Whitefish, if you are in Scobey, not so much.

Nemont

That same impact to Oil, Gas & Coal is felt in Montana, to a lesser degree because of our diversified economy, same with Ag commodities. My point wasn't that a sales tax was the main point of funding, and I can see I worded that poorly, so mea culpa on that.

Curious how Craig, Montana, can institute a 3% resort tax and administer, yet Scobey wouldn't be able to do something similar.

Fully agree on MT being stupid on what we tax and what we don't. Oil & Gas tax holiday is a great example of that.

 

[Nemont]

Well then...


For generating income you are making a big mistake in evaluating the two... investments aren't subject to sales tax. I would make money with a sales tax because I am an investor. They are even talking about offsetting a local sales tax with a decrease in property tax. That would be money straight into my pocket - and there is no way the renters would see any of it because rents right now are determined by demand, not cost. It is the little guy who gets a big shock when he goes to buy a car or a refrigerator. They get nailed on nearly 100% of their income (excepting food) since they don't make enough to save - and this makes that problem worse. And they don't even get a break on their rents. But me, cha-ching....

Guess I'll take all that money and buy a sales-tax free Montana hunting property and keep you peons off it like all those Texans who pay no income tax in 6.25% sales tax country

Really? who would have thought that demand drove price? Do you really think it is sales taxes that are the reason out of state people have money to buy land in Montana? So explain how come we have what 3 million tourists who come into the state and leave no tax revenue behind other than maybe some gas and hotel taxes? How much revenue do tourist leave for general fund items? Also show me where I said do away with income taxes. How about exempt the first $40,000 or $50,000 from state income taxes? The issue is what is good tax policy and what is not. I have investment now that have never been taxed by Montana because I don't capitalize them. If I never capitalize them I pass them to my kids tax free on a stepped up basis, yet I purchase stuff every day that would be taxed.

I know it is badge of honor for a democrat to decry a state wide sales tax of any kind but just because it is used as hammer every election doesn't mean that it is always bad tax policy.

Nemont

 

[Nemont]

Where is Craig Montana located? How many more fly fisherman are coming to Craig because a river runs through it? It is probably on a magnitude of tenfold more people coming through Craig to beat the water to froth then come through Scobey. Okay if you don't like Scobey then let's say Opheim or White Water or Turner. I can name about 300 small towns that don't have the option of adding a local option tax because it would generate less income then it costs to administer. Yet they are still taxed to pay for things used by tourists every day.


Nemont

 

[RobG]

Really who would have thought that demand drive price? Do you really think it is sales taxes that are the reason out of state people have money to buy land in Montana? So explain how come we have what 3 million tourists who come into the state and leave no tax revenue behind other than maybe some gas and hotel taxes? How much revenue do tourist leave for general fund items? Also show me where I said do away with income taxes. How about exempt the first $40,000 or $50,000 from income taxes? The issue is what is good tax policy and what is not. I have investment now that have never been taxed by Montana because I don't capitalize them. If I never capitalize them I pass them to my kids tax free on a stepped up basis, yet I purchase stuff every day that would be taxed.

I know it is badge of honor for a democrat to decry a state wide sales tax of any kind but just because it is used as hammer every election doesn't mean that it is always bad tax policy.

Nemont

Most of the money spend by tourists is on gas and hotels (and restaurants, which have no tax), not cars and refrigerators which are a nut kick to the little guy saddled with sales tax. Exempt the first $40-50k? How cute. They pretty much flattened the tax last go around. You are at max if you make over $13,500.

Bottom line is that you would wind up with both taxes. Idaho has 7.4% income and 6-9% sales tax. The wealthy love the sales tax - it is even better than a flat tax as it is easy to avoid.

 

[RobG]

At the risk of being back on topic, a birdie told me about this one

On his website Matt Rosendale highlights the Montana Chamber of Commerce awarding him a "Champion of Business" three times as a legislator. What he didn't say was the Chamber endorsed his opponent Jesse Laslovich for State Auditor (Great Falls Tribune, June 17, 2016) this election. In fact, Laslovich was the only democrat to the get the Chamber's endorsement.


In their press release the Chamber said Laslovich's work as “the top lawyer in the state auditor’s office has prepared him for the oversight of insurance and securities.” That should be a clear message that you should vote for Laslovich regardless of your political affiliation.

 

[Ben Lamb]

Where is Craig Montana located? How many more fly fisherman are coming to Craig because a river runs through it? It is probably on a magnitude of tenfold more people coming through Craig to beat the water to froth then come through Scobey. Okay if you don't like Scobey then let's say Opheim or White Water or Turner. I can name about 300 small towns that don't have the option of adding a local option tax because it would generate less income then it costs to administer. Yet they are still taxed to pay for things used by tourists every day.


Nemont

Got it. I was focused on the part about administering.

The complaint that Eastern MT funds stuff others don't isn't dissimilar from when the timber boom was happening and Western MT was paying for EMont's infrastructure, right? It's all cyclical and generally works out in the end, especially when you have a legislature that's more interested in acting like the petulant children in Congress and stonewalling the executive on about everything they can.

A statewide sales tax doesn't equal the playing field, it pushes the bulk of tax revenue to more populated areas to be allocated to rural areas that don't produce as much revenue, right?

Personally, as a small business owner who deals with a very small payroll, I've not found MT's tax code to be very punitive or unaffordable. And it seems to help us stay solvent when other states who focus on consumptive taxes for citizens go in the red.

 

[Nemont]

I never said the Montana tax code was punitive. I said we are stupid in what, how and why we tax some things and not others. As for the issue of Eastern Montana, well we will just have to agree to disagree. One reason a sales tax appeals to me is because the property tax unfairness between east and west. I pay far higher property taxes than people in the west and it isn't because we have local additional mill levies. The reappraisal benefited every property owner at the cost of the those of out east, it is just a fact.

The Legislature, dominated by the population centers, stuck it to us our here because they could and then they say that it was to make it more "equitable". What is going up faster in value?, My home here in Glasgow or RobG's property in the Bozeman area? Yet I am taxed at a higher rate by the state simply because the Bozeman, Helena and Kalispell Reps and Senators wanted to bring home the bacon without causing an uproar. A sales tax, which would capture revenue from tourist, could be used to provide property tax relief and we could leave the income tax alone but hey all those land lords in Bozeman don't want to pay their share of property taxes and instead had the bill sent to me to pay because they don't like a sales tax.

Nemont

 

[Nameless Range]

I don't know much about taxes, and do not have a strong opinion on the issue. Just a question. This pie chart is on the DOR's website. Am I reading this correctly that the largest influence on what your property taxes are is local schools, and local county government? If so, is the reason that there is such a disparity in the taxes between Montana counties in Nemont's example largely due to the cost of operating schools and county govts in those places? I've never thought much about income vs sales taxes and I think I understand some of the pros/cons, but as someone who doesn't have a dog in the fight, the idea of capitalizing on the fact that people come here and spend tons of money(tourism is one of our largest economic sectors) makes a sales tax (to some degree) make sense at first glance.

http://revenue.mt.gov/valuation-process#Property Tax Allocation

 

[Ben Lamb]

Property taxes got even further messed up by tying school funding to oil receipts & using property taxes as the backstop. That was a bill from rural legislators, btw, who thought the boom would never end. A lot of folks from population centers brought that up, yet here we are. I know I pay a lot in property taxes though, and I live in a town that fails at basic things like snow removal.

As for the make up the legislature, I wouldn't say that it's true that the reps from different cities have more sway than rural legislators. Look at leadership of the Leg, committee structure and overall population of members and you quickly see that Montana's Legislature has a lot of rural representation, and in many instances, outsized representation due to leadership roles and committee assignments.

But now we're far off the topic of the land board, and how awful the Republican candidates would be for sportsmen's access & conservation.

 

[RobG]

Nemont - You can't really compare houses in Bozeman to Glasgow. $300k will get you a big house in Galsgow. However, I bet in few years you won't even be able to find a single family home under $300k in Bozeman. If you want to pay less taxes buy a smaller house in Glasgow, and it will still be way nicer than anything here.

When they push the local tax here you can bet I'll be quite vocal about not offsetting it with property tax breaks for folks like me.

But Gianforte can buy the governorship and land board and not have to pay sales tax so he don't care.

 

[Nemont]

Ben,

Why doesn't Helena adopt a local option tax to plow the streets in the winter instead of having all those slot care tracks around town?

Nemont

 

[Nemont]

Nemont - You can't really compare houses in Bozeman to Glasgow. $300k will get you a big house in Galsgow. However, I bet in few years you won't even be able to find a single family home under $300k in Bozeman. If you want to pay less taxes buy a smaller house in Glasgow, and it will still be way nicer than anything here.

When they push the local tax here you can bet I'll be quite vocal about not offsetting it with property tax breaks for folks like me.

But Gianforte can buy the governorship and land board and not have to pay sales tax so he don't care.

Are you sure about that? You may want to review the run up in housing prices in this neck of the woods, we have higher median prices right now than Helena. $300,000 would probably buy me a house of the same square footage in Bozeman but the lot would be bigger Glasgow. Yes your values will be increasing but due to the way the tax loophole is rigged for those on the west side of the state your will still pay a lower percentage on the increasing value of your houses.

I bought my house in 2001 and paid a whopping $87,000 (5 bedrooms, two baths, attached garage) sitting on 4 lots. I still paid more for my property taxes back then based on my assessed value compared to somebody in Bozeman in a $200,000 house. I have enough friend in Bozeman to know what you are saying isn't accurate regarding the value of homes and how nice they are.

 

[Nameless Range]

Thanks for the explanation Nemont. More to it than I was aware of.

 

[RobG]

Nemont - I checked what's for sale here and there. We are roughly 50% more based on bedrooms/baths/sq footage.

 

[RobG]

Votesmart info on Arntzen's record:
Ratings:
14% by Montana Sportsman Alliance
0% for Montana Public Employees Association!
92% by UPOM
100% by Americans for Prosperity
But hey, she's got a 93% rating from the NRA and that's all that matters for overseeing our schools!


And here is the definitive voice on Stapleton, the wrong candidate for Secretary of State.

 

[RobG]

Here's who is paying for Arntzen: http://votesmart.org/candidate/campaign-finance/40826/elsie-arntzen#.WBj-TSS9Qkx

Big contributors.
The Carsons... they seem to be in the gambling business with husband Steven Arntzen. What a perfect fit for overseeing our schools!
David Hope, the evangelical guy
Heidi Schmalz... Central Gaming's general manager.... fretting about how smoking ban killed business. http://billingsgazette.com/news/sta...cle_425bdcbc-d70c-11de-a3bf-001cc4c03286.html

Stopped researching there.

 

[RobG]

The money:
Romano (D Sopi)

Rosendale (R Auditor)
Laslovich (D Auditor)

 

[Ben Lamb]

Ben,

Why doesn't Helena adopt a local option tax to plow the streets in the winter instead of having all those slot care tracks around town?

Nemont

Because our city commission is busy trying to get rid of a 110 year old fountain fountain and pass resolutions about the Smith River instead of working on our decaying infrastructure and lack of competent plowing crews?

 

[Nemont]

RobG.

Have you check the assessed value instead of the sale prices. You need to review how the assessed values in Eastern Montana were "equalized" in order to make sure places with rapidly increasing home values didn't pay more in taxes.

Nemont