By CHARLES S. JOHNSON Gazette State Bureau
HELENA - The Senate Taxation Committee on Thursday tabled on identical 9-2 votes a pair of bills by Democratic senators that would have raised the state's taxes on beer and gambling machines.
The lone supporters of both bills were Democratic Sens. Ken Toole of Helena and Jon Ellingson of Missoula.
Opposing the bills were Democratic Sens. Kim Gillan of Billings, Dan Harrington of Butte, Trudi Schmidt of Great Falls and Chairman Jim Elliott of Trout Creek, and Republicans Jerry Black of Shelby, Jeff Essman of Billings, Kelly Gebhardt of Roundup, Sam Kitzenberg of Glasgow and Bob Story of Park City.
The first to die was Senate Bill 343, by Sen. Mike Wheat, D-Bozeman, which would have raised the state tax on beer by $16 million a year to fund alcohol and drug prevention and treatment programs.
"The bottom line on this is do we pay on the front end or do we pay on the rear end?'' Toole asked. "We seem to come up with the money to put people in jail, but no money to keep them out.''
"I think we're underfunding this type of prevention and how do we address it?'' Kitzenberg said. "If not here, where?''
He said he fears the Legislature won't pass any tax increases in part because of Democratic Gov. Brian Schweitzer's opposition to them.
"The governor said no new taxes. I thought that to be a foolish statement,'' Kitzenberg said.
No one disputed that Montana has a drug and alcohol problem, but senators opposed targeting taxes on one industry to cover the costs.
"To impose selective sales taxes on certain people and businesses, I just can't do,'' Black said, citing a stream of bills to raise or impose new selective taxes on products. "You might as well go to a sales tax and be done with it.''
Toole said Montana's entire tax system is chock full of selective taxes and tax breaks.
Next on the chopping block was Toole's SB248, which would have raised about $40 million a year by doubling the tax on video gambling machines from 15 to 30 percent on the sixth through 20th gambling machines. Montana's current tax rate is the lowest among the states and hasn't been adjusted in its 16-year history, he said.
When he campaigned last fall, Toole said voters' top concern was for property tax relief, and little appears in the offing this session. His bill would have targeted the higher gambling revenue for property tax relief for homeowners and renters through an income tax credit equal to $106 a year per housing unit in fiscal 2006.
"It's too bad property taxpayers aren't up here much and the gaming industry doesn't stay home more,'' Toole said.
When she campaigned last year, Gillan said heard that "people hate gambling'' before they voiced concerns about property taxes. She said she doesn't want to increases the state's dependence on gambling tax revenue "because we'll never be able to phase it out.''
Replied Toole: "We can't even raise the tax on gambling. We're not going to be able to get rid of it.''
Black said the bill would impose a "a real hardship for so many small operators'' who couldn't survive without the gambling machines.