HELENA - This past weekend, Schweitzer administration officials and a dozen House Republicans worked out “common ground” they hope will solve an impasse on the state budget.
Below is a summary of the basic points of their agreement, which now goes before a special session of the Montana Legislature:
Another $30 million in state funding may be approved, if extra revenue is available in the state treasury. Also, $41 million will be set aside for school construction beginning in 2009 and $10 million for startup costs related to full-day kindergarten.
Business tax cuts: The first $65,000 worth of a business's equipment would be exempt from property taxation. The lost revenue to the state and local governments would be about $14 million a year. The state would reimburse local governments.
This cut is tied to the authorization of several new “tax compliance” measures by the Revenue Department, to collect money it says is owed mostly by nonresidents and some business taxpayers.
Businesses also already are getting a $15 million-a-year reduction in unemployment insurance taxes.
Property tax cuts: The state would increase by $22 million over two years its aid to certain school districts, enabling them to lower local taxes. Districts that already have relatively low local school taxes will get little or no relief.
Homeowner rebate: A $400-per-homeowner rebate this year, as proposed by Gov. Brian Schweitzer.
Renter tax credit: $6 million a year in state income-tax credits for renters.
Homeowner tax credit: Another state income-tax credit for homeowners, if the revenue is available. The amount is uncertain.
Spending reductions: About $48 million in reductions from the spending increases approved by the Senate last month, which still leaves substantial increases in most state-agency budgets.
Energy development incentives: Property-tax reductions of up to 75 percent for new power plants, transmission lines, pipelines and other projects related to production of energy that has a minimal impact on the environment.
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