When the Legislature can’t even come up with a tiny slice of money for high school students to buy solar systems for schools, it is time to consider comprehensive tax reform – although no appetite for such a thing seems apparent as the Legislature approaches adjournment.
During my service in the Montana Legislature in the ‘80s, I had the privilege of learning the state budget inside-out, particularly when I chaired the appropriations subcommittee on human services dealing with our most expensive and heartrending challenges of the sick, disabled, elderly and poor. Several sessions of this work gave me intimate knowledge of unmet needs, and lured me down the trail to tax reform.
In the summer of 1988, I started contemplating the possibility of a sales tax. While Montana had dabbled in mini-sales taxes on motels and small tourist towns, a general sales tax had not been debated since my first session in 1971. I remember being tempted to support it, believing we needed more money for schools and higher education. But a careful reading proved it was designed for a single purpose: lowering property taxes, primarily for big business and industry.
After a public vote and campaign debacle, no one had breathed a word about it since that time except the Montana Democratic Party – my party – which maintained its “unalterable opposition” in every party platform believing a sales tax was disproportionately too burdensome on low income citizens. However, believing we could not wring more money from property and income taxes, I wondered if careful design could eliminate the regressivity.
So I drove to Helena to attend a meeting of the Interim Revenue Committee to request a sales tax study – how it could be designed and implemented, and how it would impact Montana. The reception to my request was negative and loud. But as I left the room, a number of lobbyists and onlookers surrounded me in the hall. They would volunteer to study a sales tax if I would organize such an endeavor. And we did! The participants at these meetings grew over the year, since word got around that more money might be had, and everyone wanted in on it – or, wanted to make sure more of it remained in the pockets of the citizens – or, wanted to make sure it was fair. It was an amazing effort of volunteerism, self-education and consensus building.
The upshot was a bill request I made for the 1989 legislative session. So huge was the task of carrying this bill that I carried no other legislation that session. We moved forward an inch at a time. Everyone needed to know what was going to be taxed, or how the tax money would be collected, or how much property tax relief would be recommended, or how we would help local governments and education. Each time the questions arose in a public forum, we were ready with suggestions. It was a race to see if the proponents could stay a baby step ahead of the curious and sometimes irate throng.
At the largest public hearing, the lineup of speakers representing both sides of the issue wound all the way down the hall outside the auditorium. Leading the opposition, the spokesman of the Democratic Party took me to task as a traitor. My Republican colleagues were equally negative about a sales tax — unless it was entirely revenue neutral, translating into no new funding for human services and education. And never the twain should meet, it seemed. But our group was on a mission, and deeply believed in the need for a little more money – for mental illness services, Medicaid, hospitals, teachers, institutions, universities, local governments, infrastructure - and yes, for property tax relief.
Toward the end of the session, this effort came to a quiet death. It remains mission unaccomplished. I tend to believe that the door is still open for comprehensive reform since when I ran for governor on this issue in 1992 I received an amazing 49.2% of the vote.
The present piecemeal approach of a tiny sales tax here and there for luxuries, motels, tobacco, gas – is a pretense, is inefficient, and is unfair. Sooner or later we all have to pay taxes if we want the money. And don’t kid yourselves – both parties would love some of that money. In the meantime, accessing the pocketbooks of the millions of tourists is not all that bad.