Montana legislators to weigh in on special session for $1.5B surplus

Montana lawmakers will weigh in on whether to hold a special session in September to return some of the state’s $1.5 billion estimated budget surplus to taxpayers and reduce bonded debt.

“These unforeseen, unappropriated and surplus tax collections belong to the people of Montana,” said a letter from Republicans to the Montana Secretary of State requesting a special session. “The people of Montana have overpaid their tax liability to operate our state.”

Ten lawmakers signed the letter, one of the conditions for requesting the Secretary of State issue a poll on convening a special session. Friday, Secretary of State spokesperson Richie Melby said in an email the process for submitting ballots to legislators already was underway.

The letter calls for a Sept. 29 start date. A special session isn’t guaranteed, but Senate Majority Leader Cary Smith, one of the signers to the letter, said he’s hopeful the required simple majority will agree it’s a good idea.

“I think we’re going to get a pretty good response,” Smith said Friday.

However, in a statement issued the same day, Senate President Mark Blasdel didn’t commit to supporting a special session, although he lauded “conservative budgeting from the Legislature” for getting the state on track fiscally.

“Legislative Republicans are excited to return excess tax money back to the taxpayers who paid it,” said Blasdel, R-Kalispell, in the statement. “The timing of a legislative session to accomplish that and the exact mechanisms for returning the money are points of ongoing discussion among legislators.”

Earlier this summer, the Legislative Fiscal Division said the beginning of the 2025 biennium looked positive for revenue collection in Montana, but it also said “economic uncertainty clouds the future,” and it already predicted a shortfall in the state’s fire fund and future revenue drops. Several people described state budgets in general as being on a “sugar high” partially boosted from temporary federal stimulus funds for pandemic relief.

Late last month, Chair of House Appropriations Llew Jones wrote an opinion noting the federal government had infused $14.5 billion into Montana’s economy over the last couple of years, and the influential Conrad Republican advocated for using surplus money to plan for the future, including the possibility of a recession. He called on returning the money to taxpayers by, for example, reducing the state’s liabilities and refilling coffers for emergencies such as fire.

In January 2023, the Montana Legislature convenes its regular session, but in a phone call, Sen. Smith, R-Billings, said he and some other members of his party don’t want to wait that long to address the surplus. He said they prefer ironing out rebates beforehand given the financial pain Montanans already are feeling, the time it will take to execute payments, and the fact that the budget is the last thing legislators approve in their regular session.

“We want that to happen now while people are struggling with the effects of inflation and not make them wait until May,” Smith said.

The letter requesting the special session sets out three goals: Rebates of up to $1,000 for Montana resident homeowners who paid property taxes on a primary residence in 2021 and 2020; rebates of up to $1,250 for individual taxpayers and $2,500 for couples filing jointly; and a payment of $100 million to reduce Montana’s bonded debt.

Last month, Democrats released their own priorities for the surplus, calling for millions toward workforce housing, property tax relief, child care and mental health. Their plan also included a one-time property tax refund for working people.

Montana code notes the Secretary of State will send ballots out within five days of request, this one received August 10, and ballots are due not more than 30 days after being mailed. 

In addition to Smith, the Republicans signing the letter were the following: Reps. Sue Vinton, Bill Mercer, Matt Regier, Jane Gillette, and Terry Moore, and Sens. Greg Hertz, Dan Bartel, Ken Bogner and Tom McGillvray.