Federal tax bill hits Montana funding hard

By: 
Eleanor Guerrero
CCN Senior Reporter

Senator Tester gave news outlets an annual report last month. He talked about the recently signed federal tax bill.
“Last week the Senate voted to add $1.5 trillion to our nation’s debt in order to pay for tax giveaways for wealthy out-of-staters.”
Tester said, “Politicians voted for this handout to the wealthy, while health insurance for tens of thousands of Montana kids and funding for Montana’s Community Health Centers dries up.”
Montana Department of Revenue originally predicted a loss of over $24 million a year in federal royalty payments but Congress waived this withholding that would normally go to lower the deficit. However, Revenue spokesperson Mary Ann Dunwell says other losses will occur, from $12 million to $40 million dollars in revenue losses from the state income tax due to federal changes. (See box, page 2).
Mike Kadas, Director of Revenue stated that 60 percent of Montanans would see a decrease in taxes from a few hundred to a $1000 but the top one percent would see a decrease of over $28,000.
These decreases are not permanent like corporate tax decreases. All these tax cuts, according to Tester, puts the burden on “middle class backs.” He said, “It increases our debt by $1.5 trillion or more. Think tanks are saying well over $2 trillion.” There was no funding in the bill for education or infrastructure. He wonders where such funding will come from as legislators seek, after the fact, to fund this bill.
Tester said, “We’ve sent a letter. We’d love to give you our perspective what would help rural Montanans.” He hopes there are no longer these “back room” deals. He called the hidden health care bill activities of last summer “goofy.”
Newspapers, free press protected under the Constitution, face a unilaterally renegotiated trade deal tariff on Canadian wood pulp imported to the U.S. It may put all rural newspapers out of business due to the increase in cost of wood pulp. Only one paper mill in Washington State requested this tariff.
Tester said, “Local news is critically important to our rural communities and it is essential that you inform Montanans about what is going on in Washington DC.” Over 600,000 U.S. jobs could be affected. The paper mill employs 250.
On Jan. 18, Tester’s office told CCN, “Jon thinks this issue is exactly why it is important that we negotiate fair trade deals with our trading partners.  Also, Jon's office raised the issue of these tariffs with the American Forest and Paper Association last week.”
Tester said, “Montanans need to be informed, because there’s a lot happening back here that affects you and the people who read your paper or listen to your station.”
Regarding CHIP, “The Children’s Health Insurance Program, known as CHIP funds the Healthy Montana Kids program. I voted to create the Healthy Montana Kids program when I was in the state legislature. At the time, it was a bipartisan initiative. Now it’s tragically fallen victim to politics.”
He noted, “Healthy Montana Kids provides parents who are struggling to make ends meet with affordable health insurance for their kids.”
More than 24 thousand children use the Healthy Montana Kids program.
One listener reported, “There is talk of our local hospital having to close.”
Tester sympathized, “Maybe it is the Barista in Glasgow, the babysitter in Sidney, or the cashier in Columbia Falls, someone in your community likely relies on this program to keep their family healthy without breaking the bank.”
He concluded, “If Congress can jam through a partisan plan to give big corporations permanent tax breaks, they should be able to find the money to make sure Montana families don’t lose their health insurance.”
He said CHIP, through Healthy Montana Kids, “not only provides families with peace of mind...it provides lifesaving care.”
In the current proposed shutdown, it is stated that CHIP would be reauthorized for 6 years. It appears there would be no partisan dissent.
What is not widely publicized is that CHIP and Montanans health care, are intimately connected to having access at local health centers. This bill would not fund them.
Tester explained, “In many communities across Montana that (CHIP) care is provided by local Community Health Centers.” He fears the centers will “dry up.”
He said, “Whether it is Bullhook Community Health Center in Havre, the Southwest Community Health Center in Butte, or the Northwest Community Health Center in Libby, these facilities rely on the Community Health Center Fund to keep the lights on and provide lifesaving care for their community.”
As Congress allowed this fund to expire, it left Community Health Centers across Montana “scrambling to keep their doors open.”
More than 100,000 Montanans rely on Community Health Centers for their medical care. They get annual checkups, immunizations, and cancer screenings.
“These facilities are literally lifesavers,” said Tester. “The Community Health Center Fund and Healthy Montana Kids make a real difference in our communities.”
He observed, “We need to responsibly address our growing debt and ensure we aren’t mortgaging our kids’ futures. But I will always defend the things that work for Montana families. In the coming weeks as the Senate looks to fund the government, you can bet that I will be fighting to reauthorize CHIP and the Community Health Center Fund while fighting to reduce the out-of-state special interest spending.”
He predicted a 10 percent spike in health care premiums and 13 million insured being dropped due to increased costs.
Regarding veterans, “For the first time in years, we’ve seen homeless rates go up.” Tester said the administration cut vouchers 83 percent, and has decreased care for vets across the board.
He was “very concerned about the ability to roll back National Monuments and that it will reduce public access.”
On Nov. 27, when the Billings Gazette wrote of efforts to save Paradise Valley, “Daines himself phoned to say that he is working to get the Paradise Valley withdrawal paired with release of about 500,000 acres of Montana Wilderness Study Areas ‘that aren't suitable for wilderness.’”
In Dec., John Todd, MT Wilderness Association, wrote a guest editorial in the Billings Gazette stating, “These half-million acres, representing the wild heart of Montana, is what he wants in exchange for preventing two proposed industrial gold mines near Yellowstone National Park, which could spell environmental and economic disaster for the Paradise Valley.”
Tester called the idea, “A bad swap. The gold mine proposed would put “hundreds of businesses in paradise Valley out of business. It would impact tens of millions of dollars if not $100 million dollars-and those aren’t my words but the businesses of Paradise Valley.” People should be informed about proposals.
Lastly, Tester said, “I support the women who have come forward about sexual assault and harassment. We need to heal. We need to end sexual harassment in the workplace and everywhere.”

Federal Tax Bill Changes to State taxable income will
benefit and hurt Montanans

In a memorandum to Montana Budget Director Dan Villa on Jan. 17, Director Mike Kadas set up a chart that states that the net impact to the general fund from the federal tax bill is a loss of $12 million for 2018, $15.9 million for 2019, $8.5 million for 2020 and $2.5 million for 2021. This means a loss to Montana of approximately of $40 million dollars due to the federal tax bill over the next four years.
Montana Office of Tax Revenue media spokeperson Mary Ann Dunwell told CNN that determining what losses and from where will result to the state from the new federal tax bill is the challenge.
“It looks at a glance that it is not good for Montana state revenues. It could take us months to examine all the nuances. It’s certainly not black and white. This is not just our state, a lot of states are trying to figure it out.’
Director Mike Kadas said, “The Department of Revenue and the Office of Budget and Policy Planning are reviewing the recently passed federal tax reform bill (HR1) and its potential impacts on Montana’s tax system.  With HR1 being the most significant federal tax reform in 30 years it will take additional time to sort through the bill.  Although it will truly take months to work through the entire bill, as soon as a thorough, initial assessment is complete we will work with the Governor to determine a careful path forward.”
It may look good to Montanans at first, Dunwell noted, if taxpayers lower their tax liability, they would get more money. However she said, “It will lower the amount the State would get to run essential public services (which benefit Montanans) of which we don’t have enough anyway-OPA, Office of Disability, cuts to providers…”
Dunwell mentioned a recent news story about State cuts that stopped care for a woman’s disabled parents. Many state offices providing Montanans services are already experiencing cuts or closings with the State budget cuts. She concludes, “It’s a bad situation for State revenue.”

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