Gov. Brian Schweitzer on Wednesday proposed returning $100 million to Montana homeowners in identical, one-time, $400 property-tax rebate checks in October 2007.
The Democratic governor contrasted his proposal to a rival Republican plan that he said would give far less money to most households, while spreading big portions of the relief instead to big business and wealthy homeowners.
"This is by far the largest rebate in Montana history," Schweitzer said in an interview. "This dwarfs what Republicans do."
Republican Gov. Marc Racicot proposed the last major tax rebate totaling $21.5 million in November 1995.
Standing in front of a green house at 128 Ave. D in Billings and joined by Billings-area Democratic legislators and candidates, Schweitzer unveiled what he said was the first plank of his "Square Deal" for Montana. Schweitzer borrowed the term from Republican President Theodore Roosevelt who used Square Deal as his slogan as he campaigned against corporate trusts a century ago. Schweitzer plans to announce other Square Deal elements in the coming weeks to cover education, health care, energy, outdoor recreation and business.
His plan calls for one-time rebates for 250,000 Montana homeowners. The 2007 Legislature would have to approve the proposal for it to take effect. The $100 million would come from the greater than anticipated projected state surplus of $525 million.
Only Montana residents would be eligible for the rebate, not people who live in other states and own vacation homes here. Montanans owning more than one home could collect the rebate only once.
Schweitzer said it was appropriate to use some of this unanticipated money for rebates to help homeowners. Sarah Blackburn, who owns the green house with her husband Pat Rogers, said their property taxes had doubled to $1,800 a year the past dozen years.
This doubling occurred, Schweitzer said, because homeowners saw more property taxes shifted to them when Republican governors and GOP-controlled Legislatures handed out millions of dollars of property-tax relief to businesses and large corporations.
His announcement comes several months after Republican legislators announced their "Handshake with Montana," a series of proposals they vowed to pass and place on Schweitzer's desk by the halfway point of the Legislature if voters put the GOP in control of both houses. Democrats now have a 27-23 majority in the Senate, while the House is tied 50-50.
In their plan, Republicans said they would cut property taxes by at least 8 percent and left the door open for other tax cuts.
Schweitzer, drawing on some Republican legislators' press conference in Bozeman Monday, said the GOP plan would cut statewide property tax mills permanently for all property owners — residential, business and industrial — by 8 percent. The GOP plan, he said, would give home and farm owners $34.5 million in property tax relief, while spreading $42.5 million to other classes of property owners for a total of $76.9 million. His would direct the full $100 million for the rebates for homeowners.
The governor's plan would offer an identical $400 rebate to everyone, regardless of the market values of their homes. In contrast, Schweitzer said, the Republican plan would give $88 back to the owner of a $100,000 home and $877 back to the owner of a $1 million home. The cutoff point is a home worth $456,000 in which the household would get an identical $400 rebate under both plans.
Under the Republicans' "Handshake with Montanans," Schweitzer said PPL of Allentown, Pa., would rake in $1.8 million in annual tax relief, while BNSF Railway of Fort Worth, Texas, would collect $1.03 million. These large corporations and all businesses would get nothing under Schweitzer's plan.
"Would you rather have a Montana Square Deal or a Republican Handshake?" Schweitzer asked. Pointing to his border collie, Jag, Schweitzer said later: "They can get a handshake from Jag and that doesn't pay much."
Republicans immediately cried foul.
Senate Minority Whip Corey Stapleton, R-Billings, who heads the Republican Legislative Campaign Committee, said Republicans haven't firmed up details of their property tax-relief plan, despite the press conference in Bozeman Monday. What Bozeman lawmakers discussed Monday was just one of five or six opinions still under review, he said.
"For the Democrats to be able to say what our plan is not only is disingenuous, but he's obviously doing it for one-upmanship," Stapleton said.
Republicans are considering different kinds of property tax relief and are still mulling over elements of their plan, Stapleton said. They originally didn't intend to release the details until after the election, but after Wednesday they will move up the date they roll it out, he said.
"Ours is permanent; it's not one-time," Stapleton said. "It will take into account the necessary complexity of major tax reform. There's always winners and losers."
Stapleton said Schweitzer concocted the property tax relief plan in a slap-dash fashion because Democratic legislative candidates were bombarded with criticism for not having a plan like the Republican 8 percent tax cut.
Furthermore, Stapleton said Democrats have no credibility on property tax relief because all 50 House Democrats voted in unison last year to kill a bill that would have returned money to taxpayers.
Contacted later, Schweitzer said, "Which is it? He can't have it both ways. Either they have a plan and announced it or they don't have a plan."
Democrats do have credibility on the issue, Schweitzer said, because for the first time in a dozen years the Legislature didn't shift property taxes to homeowners.
"This is not a poker game," the governor said. "What's he saying? Is he going to call us and raise us? This is public policy, not a poker game, and we deserve an honest debate."
Meanwhile, Democrats at the press conference strongly embraced Schweitzer's plan.
"I think this is a very good idea," said Senate President Jon Tester of Big Sandy, the Democratic nominee for the U.S. Senate. "I'm an anxious to see what else is in the Square Deal."
The press conference was held, not by coincidence, in a key Senate district in which Margie MacDonald, a former Schweitzer aide, is running against House Republican Leader Roy Brown.
"This is good," MacDonald said. "It kind of redistributes some of the income that got redistributed in the 1980s back to the homeowners and out of the pockets of the large utilities and railroads, who reaped the benefits of the 1990s' so-called tax reform."