Great Falls Tribune
Gov. Judy Martz chose tax day to unveil the general shape of tax reform she will seek from the 2003 Legislature.
Some aspects of it look promising, others we're skeptical about.
As with any broad-sweep tax proposal, the devil will be in the details. Unfortunately, in recent years when the details have been assigned to the Legislature, the devil has come out pretty well.
Martz's proposal, which she plans to assign to three yet-to-be-named committees for detailed study, includes several components:
ï A 10 percent income tax cut
ï A reduction in the state's top marginal capital gains tax rate.
ï Possibly making up a good-size chunk of the lost revenue by eliminating the deduction for federal taxes paid, which coupled with the income-tax cut could lower the state's top marginal income-tax rate to the neighborhood of 7 percent.
ï Making up more of the revenue through a new or expanded tax targeting visitors from outside Montana. Martz calls it a "tourist tax."
ï Giving local governments the option of adding to such a tourist tax.
Martz didn't specify how the 10 percent income tax reduction would work, but if applied across the board, it would have yielded about $95 for a Montanan whose taxable income was $20,000 last year.
At the other end of the scale, a 10 percent cut would have reduced by at least $600 the tax bill of people with taxable incomes above $75,400.
The 10 percent cut would nibble away at the top marginal rate, but it would take a big bite out of state revenue. Martz estimates $66 million beginning in 2004.
It would take a lot of additional tourist taxes to balance that out. The 4 percent bed tax is good for about $11 million a year, so, by way of example, that tax would have to increase to 24 percent to make up the lost income tax revenue. The unlikelihood of that, presumably, is why Martz also is looking at eliminating federal deductibility
The state estimated two years ago that eliminating federal deductions would have raised an additional $116 million.
That assumed tax rates stayed the same.
In theory anyway, getting rid of the federal deduction would allow number crunchers to reduce tax rates - including the top marginal rates - to levels where all of these changes end up revenue neutral for the state.
Exactly how that gets done is where the "devil" comes into the picture.
We are reticent for two main reasons:
1. There is great potential here for making the system more regressive by shifting burden to lower-income taxpayers, a move that makes little sense in a state full of lower-income taxpayers.
2. There is similar potential that the state - especially education - could wind up with less revenue at a time when the state already is looking at the possibility of layoffs in order to keep the budget balanced.
It's far too early to say aye or nay to the proposals. The committees must do their work, and the public must be given a chance to weigh in.
We credit the Martz administration with putting some of the right balls in play. It remains to be seen how they'll be handled.
Daily Inter Lake
Montanans have a vital interest in working to reduce drunken driving. After all, 40 percent of traffic fatalities in the state are alcohol-related.
So it is commendable for Gov. Martz to announce that she will send a comprehensive proposal to the Legislature next year to make it easier to prosecute offenders, and - just as importantly - to make it more likely that there will be either punishment or treatment or both.
There is also a provision that would ban open containers of alcohol in passenger vehicles.
We know that the governor will face stiff opposition from some strong lobbies on this proposal, and that there is a longtime Montana tradition of bringing a six pack or two along on fishing trips. But everyone also knows just how irresponsible it is to put other lives at risk because of our selfish pleasures.
So we think the time is right for change.
The bottom line is that by lowering the legal intoxication limit from 0.10 percent to 0.08 percent, it will be easier to arrest drunk drivers and get them off the streets.
The difference of two-hundredths of 1 percent may sound trivial, but in most cases, if police pull a car over it is because the driver has exhibited erratic behavior or bad judgment. That being the case, we need to give police an adequate enforcement tool to get dangerous drivers off the streets.
And for those drivers who insist they can handle a few beers without being impaired, they should rest easy that police won't have any reason to stop them in the first place if they are driving as well as they think.
Of course, it's cloudy judgment about one's own abilities that is what makes alcohol so dangerous. Corrections Director Bill Slaughter notes that people "who don't think they are impaired" often cause horrific accidents just because of their "no-fear, bulletproof attitude."
There is also a practical dimension to the governor's proposal. Each year, Montana is losing as much as $11 million in highway construction money because it doesn't meet federal standards on an open-container ban and other DUI enforcement. That amount of lost money could dramatically increase if changes are not made soon.
Let's face it. Driving with a beer in the car sends the wrong message. Drinking and driving is serious business, and the state needs to treat it with the same concern it would other life-threatening behaviors.
The Montana Standard
Concern among legislators that the federal government uses money to club the states into compliance with federal wishes is nothing new.
The federal government compels states to comply with a wide variety of mandates by threatening to withhold federal money from states that insist on setting their own policy.
Some call this blackmail, while others use the milder term, "strings."
Government money usually comes with strings, meaning that conditions are attached to its acceptance by the states. Legislative Republicans, and Republican governors, make ritual denunciations every time the feds tell the states to do something or risk losing federal funds. Then they do what the feds want.
That is what is happening at the moment. Washington has demanded that Montana lower the blood-alcohol threshold for driving under the influence from 0.10 percent to 0.08 percent. It also wants Montana to ban open alcohol containers in vehicles on the highways. If the Montana Legislature doesn't do these things, the feds will begin withholding highway money next year, gradually upping the amount of withheld money to $115 million over the nine years after that.
Reportedly, the greater number of drunk-driving accidents occur when the driver has a blood-alcohol content above 0.10 percent. If that's so, the lower limit, presumably, wouldn't accomplish much. But it would accomplish something, undoubtedly, including the saving of at least a few lives.
The prospect of an open container ban was criticized by Sen. Bill Glaser, R-Huntley, as something that would "radically change the social structure in Montana."
It would, indeed. It would make it illegal, for example, to glug down beers in the cab of your speeding pickup, then sail the empties out the window into the bed of the truck. Radical, man, but perhaps overdue.
Over the years, this ritual of yelling blackmail, then bowing to it, has occurred over matters such as fuel conservation speed limits, regular highway speed limits, seat belt laws and helmet laws. It also occurred a few years ago when the Legislature bowed to the feds and began insisting on systematic invasions of personal privacy by state licensing agencies and certain private businesses as a means of tracking down deadbeat parents.
That was one example of federal coercion that was clearly out of bounds, yet both parties in the Legislature gave in to that, too.
One legislator pointed out that Montana is over a barrel. Montana is dependent on federal money. If it wants to maintain minimal levels of state government services, it has to do what Washington says.
The alternative would be huge increases in state taxes. Shoot us for not being a real Montanan, but we have to say it: The federal government's position has been right in most of the cases discussed above. The invasion of personal privacy matter is the major exception.
Maybe the legislators should ask the people how they feel. Submit the question of major federal mandates to the voters by means of referendums. Then the voters can tell the lawmakers if talking tough is enough, or if they really want them to say no to Uncle Sam, and damn the consequences.
What does it cost to smoke cigarettes? What should it cost? We've been kicking those questions around a bit on these pages recently.
State Auditor John Morrison made headlines when he proposed new tobacco taxes to help offset the $200 million annual bill for treating illnesses afflicting Montana smokers.
Former Congressman Rick Hill countered that higher tobacco taxes won't help because they'll only be used to expand government spending, not offset the cost of smoking now borne by nonsmokers.
We weighed in with a March 17 editorial arguing that taxes should be levied to raise the price of cigarettes high enough to deter people from smoking them. Deterrence, not compensation was our rationale.
Now comes the National Centers for Disease Control and Prevention with a provocative new report that pegs the cost to society at $7.18 for every pack of cigarettes smoked. And Americans smoke 22 billion packs of cigarettes a year. The agency says smoking-related medical costs and lost productivity amount to $3,391 per smoker.
Lost productivity? Perhaps it's not entirely fair to calculate the value of work lost because people die sooner than they otherwise might. But certainly it's appropriate to focus on the out-of-pocket health-care costs of smoking, which the CDC says is $3.45 a pack. Those costs are borne by everyone, including the majority of people who don't smoke.
Whenever you mention raising tobacco taxes, critics complain about the burden placed on smokers. What the CDC study does is highlight the burden smokers place on the rest of us.
You can quibble with the numbers - is it $3 or $7 a pack that it costs the rest of us when smokers light up? No one can argue the costs are inconsequential. Smokers pay a national average of about $3 a pack, little of which can be presumed to be spent offsetting the larger societal costs.
We aren't tempted to raise tobacco taxes merely to fund bigger government. And we still would like cigarettes to cost so much that nobody smoked them. But we would be happy if smokers and the tobacco companies that profit from them paid their fair share of the actual cost of smoking.
As the CDC study suggests, that cost is probably far higher than most smokers are willing to acknowledge.
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