On April 14, 2014 Montana marked Tax Freedom Day, the day on which the average Montanan earned enough income to pay off their federal, state and local tax bill. That means for more than three months, we essentially work to support government services. It is a continuing problem.
Government is growing faster than our economy. In fact, our state government has grown three times as fast as the private economy that supports it.
During the last legislative session, the Montana legislature passed a $10 billion budget-an increase of 13.4% over the previous budget. Astounding when you consider that inflation only rose by approximately 2% each year!
Funding for our State Employee Pensions needs reform. We have more than $3 billion in unfunded liabilities (state employees' pensions) that we are obligated to honor and nearly half of it cannot be amortized over the constitutionally-mandated 30-year period.
Despite challenging economic times, Montana is far too reliant on the federal government. For every dollar spent by our Montana government, 42 cents comes from Washington, DC.
One key question is, what happens if the federal government, already $17.5 trillion in debt and climbing (and more than a $129 trillion in unfunded liabilities), decides to cut back on support to Montana because it can no longer afford it? What will our legislature and governor do?
We would legislators to not raise taxes. You simply can't pay for government services by over-taxing Montanans. It is not possible to collect enough taxes from Montanans to pay off the debt. It will hurt our economy. We urge you sign the enclosed Taxpayer Protection Pledge and formally commit to hold the line on no new taxes.
Our tax pledge calls on legislators to "oppose and vote against any and all efforts to increase taxes." It would require that legislators oppose any and all net increases in tax rates, introduction of new tax category, or decreases in deductions, exemptions, or credits unless offset at least dollar for dollar by decreases in other tax rates or by increases in other deductions, exemptions, or credits. It does, however, allow genuine tax reform that is revenue neutral. (See attached "Commonly Asked Questions About the Taxpayer Protection Pledge" for more information.)
Pointing out that you have previously signed the pledge will help you resist the pressures of special interest groups who will press you to raise taxes in order to pay for their special pet projects.
While there is hope in our growing energy sector and the potential for more high-tech jobs, we still face great challenges. Government growth still far exceeds that of the private sector economy. Our financial obligations in the form of unfunded state pensions are a looming challenge that will take political courage to address.
Our message is clear. Don't punish Montanans with higher taxes due to the budgeting and spending mistakes of the past.
The Taxpayer Protection Pledge is not intended to support any candidate for office. Montanans for Tax Reform is not urging people to vote for or against candidates based on whether they have signed the pledge.