Most of the initiative issues placed on Montana ballots propose to change state statutes — to enact a new law. Constitutional Initiative 105 on the Nov. 2 ballot is different. It proposes to change the Montana Constitution, thus superceding any law that the Legislature and governor have or would enact, and trumping any future statutory initiative by citizens.
CI-105 would prohibit a tax that doesn’t exist now in the state of Montana. Specifically, the initiative, which is supported by a national real estate organization, would prohibit the state from ever enacting a real estate transfer tax on sales of transfers of land or buildings. If CI-105 passes, real estate transfer taxes would be the only type of tax specifically banned in the Montana Constitution.
The prohibition proposed in CI-105 is bad public policy. It would tie the hands of the Legislature, usurping our elected representatives’ constitutional authority to raise revenue. It would give special tax treatment to one type of transaction.
The Montana Constitution vests the Legislature with the authority to levy taxes and the responsibility to balance the budget. In Article VIII, the constitution says: “Taxes shall be levied by general laws for public purposes.” And further states: “The power to tax shall never be surrendered, suspended or contracted away.”
The same article also mandates a balanced state budget, saying: “Appropriations by the Legislature shall not exceed anticipated revenues.” And it makes the Legislature accountable for the money: “The Legislature shall by law insure strict accountability of all revenue received and money spent by the state and counties, cities, towns, and all other local governmental entities.”
Almost every time the Legislature convenes in regular session, some members introduce bills calling for new taxes. Usually, these tax bills are defeated. For example, general state and local option sales taxes have been proposed for 40 years. And they’ve been rejected for 40 years.
The political action committee promoting CI-105 is named “Montana Coalition to Prevent Double Taxation.” According to its most recent campaign finance filing on the Montana Commissioner of Political Practices website, the committee had $442,370 in its bank account on June 5. The biggest contributor to the pro-CI-105 campaign has been the Chicago-based National Association of Realtors, which had contributed $627,747 prior to the June primary election, according to information filed with the Montana commissioner. That’s a lot of out-of-state money coming in to influence a decision about Montana’s constitution.
The argument has been made that the constitution isn’t the place for writing detailed tax policy. We agree. The Legislature is the proper place to revise and debate the complexities of tax policy and to ensure that updated government decisions meet the needs of Montanans.
We encourage Montanans to vote against amending the Montana Constitution to prohibit a nonexistent tax. Vote against CI-105.