HELENA, Mont.--The last hope of getting a
local-option sales tax out of the 2007 Legislature died on the floor of
the Montana Senate Friday night.
A bill by Sen. Kim Gillan,
D-Billings, that would have allowed the residents of any incorporated city
in Montana to vote on a so-called resort tax was defeated on a vote of
31-17.
Gillan's bill died largely because of opposition from
Republicans in the chamber. Only three of the Senate's 24 Republicans
supported the bill, while 14 of its 26 Democrats voted yes.
A
broader local-option tax bill by Sen. Sam Kitzenberg, D-Glasgow, that
would have allowed cities and counties to seek a public vote on a
local-option tax, died last week by an even larger margin,
38-12.
The only other local-option tax bill this
session, by Rep. Dave McAlpin, D-Missoula, was tabled earlier Friday by
the House Taxation Committee on a 10-8 party-line vote.
A law
passed in 1985 gave resort tax authority to towns with populations of less
than 5,500 that relied on tourism as their primary industry. No resort tax
can be imposed without a vote of the people and no resort tax can exceed 3
percent.
Gillan's Senate Bill 320 would have extended that
authority to cities of any size, regardless of how heavily they relied on
tourism revenue.
SB320 grew out of a series of community
discussions led by Larry Swanson of the O'Connor Center for the Rocky
Mountain West in Missoula. The gist of his presentations to community
leaders was that much of the state's recent economic growth is tied to the
dynamism of the seven largest urban centers in Montana.
For the
past several years, Swanson has been telling anyone who would listen that
those cities need to invest in themselves if the economy is to remain
strong. The best tool for that, he has said, is some form of local-option
tax, one approved by local voters and administered by local
officials.
Gillan's bill was developed jointly by the city of
Billings, Yellowstone County, the Billings Area Chamber of Commerce,
Montana State University-Billings, the Big Sky Economic Development
Authority and both Billings hospitals.
In presenting her bill to
the Senate Friday night, Gillan said the Montana economy is booming but
the major cities are not sharing in that prosperity. Because they rely so
heavily on property taxes, she said, they are falling behind in dealing
with rapid growth.
Her bill was not the perfect solution, she said,
but "local government really can't wait much longer."
Sen. Bob
Hawks, D-Bozeman, urged his colleagues "to allow cities enough flexibility
to solve their own problems."
Another Billings Democrat, Sen. Lynda
Moss, said a 2 percent resort tax on "luxury" goods and services, targeted
at tourists, would bring in $8 million a year for the city of
Billings.
But opponents of the bill quickly summarized the familiar
arguments that have been used to sink all previous attempts at authorizing
local-option taxes.
Sen. Dan McGee, R-Laurel, said he would gladly
vote for a statewide 4 percent sales tax that reduced or replaced local
property taxes or the state income tax.
"Unfortunately, what this
amounts to is a hodgepodge of 3 percent resort taxes all across the
state," he said.
Several senators questioned who would really be
paying the tax. Sen. Joe Balyeat, R-Bozeman, said the existing resort tax
works so well because it is restricted to small communities that are truly
resort towns. If it were available to cities of all size, he said, "the
residents (would) end up paying all the tax, or at least a major portion
of it."
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