A cloud is hanging over the Legislature

The second week of the 61st Montana State legislature commenced with the introduction of clean-up bills from interim committees and hearings for new bills and executive branch funding. Hearings on stream access, Insure Montana were among the hot topics.

My minor bills on increasing the penalties for abandoning and starving a horse, and allowing local municipalities to establish speed limits and install traffic control devices both had positive hearings and are expected to go before the full Senate for a vote.

A cloud is hanging over the Legislature as new revenue forecasts are expected to be released by the governor’s office this week. Since a significant share of our state’s revenue is derived from oil and gas production, payroll tax and corporate profits, the effects of lower oil prices, recent lay-offs, and corporate losses are problematic.

The stated goal of the Republican Caucus in the Senate is to maintain a $250 million “rainy day” surplus and an overall balanced budget. Under the governor’s current proposed budget, the surplus stands at $277 million. As one might recall, the government of Montana grew 41 percent during the last four years. If the revenue forecast declines as expected, I anticipate the Montana Senate will call for a reduction of government spending by perhaps as much as 5 percent. Tightening the belt is always difficult, but in this market, cutting programs that provide needed human services is going to be especially tough.

An observation of the legislative process is what I call “the law of unintended consequences.” Most bill drafters have the best of good intentions, but what frequently happens is that a bill often times has unforeseen or unintended consequences. Changing statute is tricky business, and without clearly-defined terms and thorough analysis, a bill may end up doing the opposite of what was intended.

Take the Montana Business Equipment Tax, for example. During the campaign, I had often stated that a tax on equipment discourages investment and growth. It is better, I said, to tax profit and not investment.

The problem with eliminating the equipment tax altogether, however, is that Columbia Falls depends upon the equipment tax from larger companies for a large portion of their revenue. Simply eliminating the equipment tax across the board, without restructuring the tax code, would have the unintended consequence of hurting Columbia Falls.

As a result, my business equipment tax bill has undergone several revisions and now stands at providing an exception for all businesses on the first $200,000 worth of equipment. The reduced exemption may not be the panacea that I was looking for, but it’s a positive step forward.

 A final observation for this week is on the subject of term limits. For the record, I recall voting for term limits when it was on the ballot both the first and second time. It seemed like a good idea at the time and reflected a general sentiment of government dissatisfaction.

When I learned that great citizens like Bob Brown, Bob DePratu and Bob Lawson could no longer represent us in Helena, I began to have reservations on the merits of term limits. After seeing the effects of term limits firsthand, I am now convinced that this is another example of a policy that was well-meant but has had unintended consequences.

Term limits have made government bureaucrats and lobbyists the guardians of our legislative expertise rather than elected officials. Accountability of government programs has been lessened since few elected officials have firsthand knowledge of previous legislation.

Take the Insure Montana program, for example. Insure Montana was designed to provide businesses with less than nine employees with subsidized insurance to promote growth. The employer, the employee and the state all contribute. The idea was that as a business grows, that business would transition out of the program and a new business would replace it.

Insure Montana was intended as a bridge, not a destination. What has happened, however, is that few businesses have left, and many more have simple hired additional contractors in lieu of employees in order to stay eligible. Currently, there are about 600 businesses on the waiting list, and the State Auditor has asked for an additional $7 million in funding. Since there is only one legislator left that has any recollection about the original intent of the program, I would argue that this is an example of how term limits have contributed to diminished checks and balances.

Sen. Ryan Zinke, R-Whitefish, represents Whitefish and Columbia Falls.