State Legislature 2020: Tom McGillvray

For some politics is about power, control or self-serving projects to favor one person’s interests over another. For others it is about climbing the ladder to higher office.  It is none of that for me. I left a successful and rewarding financial advisory practice to pursue full time legislative work.  Running for office to me is about values.  Those values are life, livelihood, and liberty.  My goal as a State Senator is to support legislation that will protect the freedom and property of Montanans to the end that each induvial has opportunity to better their condition.  The obverse is also true. Legislation that limits freedoms, protection of property or productive life and livelihood I will oppose. The government that does not protect life, property and liberty is worthless and a curse on the people it proports to serve.

My policy priorities are driven by the values indicated above.  I will endeavor to honor those values with each vote and interaction with constituents or interest groups. Therefore, I will be protecting the natural and innate God-given rights of the individual. Since no God-given right comes at the expense of someone else, I will not support policy which favors one class of individual or business at the expense of another. To that end, regulations should not pit one business or worker against another, unnecessarily impede individual or business success and should be competitive with sister states.  Taxes should be fair, broad-based and low. Government should focus on the protection of property (land, assets, homes, incomes, thought, conscience) and the individual’s opportunity to work, make a living and live free.  These principles will guide the legislation I support or don’t support and will create the greatest opportunity for all to be successful in life.

The long-term needs of future generations should not conflict with our current needs. In fact, the needs of both are congruent and there should be little tension between the two. The needs of every generation are a limited government that does not usurp their fundamental freedoms by overregulating, over taxing or consuming an increasing share of GDP that undermines the current or future fiscal stability of the nation. When the priorities of the current generation are correct, that benefits the next generation. When they are not, as is the current situation, all future generations are in jeopardy. Witness the recent 2020 federal deficit which is expected to exceed $3.8 trillion. This dwarfs the Obama years by 2.5 times. Regardless of this reality, special interests persist in programs like Medicaid expansion and other entitlements that are consuming an ever-increasing share of GDP. John Cogan in his exhaustively documented and researched book, The High Cost of Good Intentions, makes the case that the next generation will face a federal budget that is entirely consumed by entitlement spending.  This leaves future generations hamstrung with regulatory restrictions, no money for defense or infrastructure and inflationary and tax pressures unfathomable to my generation.  Therefore, I will not be supporting the expansion of government or the cronyism that favors one generation at the expense of the next. I will support a competitive educational system that focuses on reading, writing, math, history, and the technical training and skills that prepare citizens to think, work and be successful for generations to come.

First, a trustee does not have autonomy to deliberate or do as they see fit.  The trustee is obligated by law to fulfill the terms of the trust by which he was designated a trustee. If the trust says the trustee must only do X, he cannot legally do Y.  A good legislator is a trustee in the sense that he has a legal obligation, indeed swears an oath, to uphold the constitution of the United States and the state of Montana.  He cannot do otherwise regardless of what any constituent or interest group desires.  In much the same way as our founding fathers, I see my role as a fiduciary to the people of Montana and my district. In my role as a Certified Financial Planner (CFP) I served as a fiduciary to my clients. A fiduciary must not, cannot recommend anything that is not a direct benefit to the client and in fact has an ethical and legal duty for the financially wellbeing of his client. This is also true of legislators and the general good of the state. As a delegate, I have sought the input of constituents via door to door campaigns, meetings and listening. I will continue to do so.

I will work with anyone with a good idea, a good amendment, or a good bill that I believe is good policy. I supported, spoke in favor of and voted for hundreds of bills sponsored by both Democrats and Republicans because they were good ideas. I’ve seen Democrats and Republicans vilified by their party for supporting the ideas or bills of the other party. Partisanship can be violent, vitriolic, and venomous. As House Majority Leader in the 2011 legislative session I worked with Republican and Democrat legislators to craft major workers compensation reform. As Republican leaders, we specifically asked and worked with Democrat legislators to carry and pass this legislation. I co-sponsored a bill with then Representative Paul Beck, D- Red Lodge in 2009 (HB 133) to create reciprocal fishing agreements with the state of WY that covered 10 miles on each side of the shared MT and WY border. These are a few examples of bipartisan legislation that I supported. Going forward we must have a solution on pension reform. Currently there is a bi-partisan group working on the Montana pension system’s $4.5 billion unfunded liability. This liability requires approximately $250 million per biennium in additional taxpayer dollars just to keep it from sinking deeper into the red. Solutions will take thinkers, financial experts, and work to come to a resolution that will preserve the constitutional guarantee to current Montana pension participants, and a viable retirement plan for state employees in the future.

Montana has a tax system that heavily relies on income and property tax. Approximately 68% of all state and local revenue collected come from these two sources. We also have sales taxes on beer, wine, gas, rental cars, accommodations, resort taxes and tobacco in addition to other assorted taxes and fees. Due to regulatory wars on natural resource industries, we are seeing declining revenues from these traditional sources. According to the Montana Department of Revenue Biennial report, natural resource industries paid taxes of $253 million in 2018, and $310,000 in 2015 in state and local taxes.  By contrast wind paid a total of $8.5 million in 2017 in local property taxes. Online retailers pay no tax in Montana while local brick and mortar competitors pay property and corporate taxes. Therefore, due to changing industries and methods of doing business, I support, and it would benefit us, to have a bi-partisan group of legislators, tax, and industry professionals work toward comprehensive tax reform.  Both gubernatorial candidates have said they do not support a general sales tax. Therefore, the options are limited because you can’t impose a sales tax on online retailers if you don’t have a statewide general sales tax. I don’t support piling on a local option sales tax to our tax menagerie without comprehensive tax reform.  Removing business equipment taxes shifts tax burdens to income tax or residential property taxpayers and narrows our tax base further. Regarding the 2-year reappraisal cycle, I believe it to be a bad idea. The department of revenue cannot legitimately re-appraise all residential property every two years, so arbitrary property value increases are not uncommon, and appealing appraisals is an intimidating process.  I support going back to 6-year appraisal cycles and making it illegal to increase valuations upon appeal.

I would support liability protections [except in instances of willful misconduct, reckless or intentional infliction of harm, or eliminating standing employee protections.] 

Medicaid Expansion faces multiple problems.  First, it promotes a system that produces dependence and impedes upward earnings mobility. For example, an eligible family of 4 has no incentive to take a raise which would jeopardize free health insurance plus other benefits that can total up to $30,000 or more. This has been a problem since the start of Medicaid in the 1960s. Government programs fail to eliminate poverty and create dependence.  Second, Expansion creates perverse incentives for states to spend more to get more. Expansion was implemented by the federal government paying 100% of the cost for the states, then 96% and finally 90%.  So, a state that spends $1.00 today receives $9.00 in federal funding for Expansion.  (Try that with anyone, tell them if they spend a $1.00 you will give them $9.00 more, trust me, this experiment won’t end well for you…and if the first $1.00 is someone else’s money it only gets worse.) Most politicians and lobbyists find it impossible to resist federal money, so federal deficits are driven higher with this policy. Third, Medicaid has intolerable levels of fraud, waste, and abuse.  A recent audit found between $81 and $152 million in questioned costs related to ineligible participants in Montana Medicaid programs.  The first change we need is a governor who cares about the elimination of waste, fraud, and abuse in his departments. Second, Montana Medicaid spending has grown by 437% in the last 16 years.  That is unsustainable! Therefore, I support Medicaid block grants to the states. Block grants end perverse federal match incentives, save billions of dollars, and give states freedom to design programs which meet the needs of the vulnerable while also supporting upward income mobility to move Montanans from program dependence to financial independence.

In June, the legislative fiscal division (LFD) estimated the negative cash drain for 2020 at over $300 million due to forced economic shutdowns.  In addition, LFD estimates the 23 biennia to have a negative structural balance of $154 million. The University of Montana Bureau of Business and Economic Research estimated the loss of over $6 billion in personal income and 50,000 Montana jobs.  These problems are serious and are primarily the result of government malfeasance in shutting down the economy via the abrogation of our constitutional right to pursue “life’s basic necessities” (Article 2, Montana Constitution). Between FY 2016 and FY 2018 traditional Medicaid spending (see page 6) which serves the elderly, disabled, and mentally ill dropped by $20 million. During the same time frame Medicaid Expansion (the HELP Act), which serves a largely healthy population, grew by over $500 million (about $50 million state funds).   As noted in question 8, Medicaid spending has increased 437% over the last 16 years. That is not sustainable, yet history shows that entitlement spending has increased consistently for 100 years regardless of which party is in political power. My spending priorities will be the vulnerable, infrastructure, quality education, and public safety. We simply cannot afford to take care of everyone, particularly when they are healthy and able-bodied.

SB 406 [the 406 Impact District bill] was a bill that had the potential to cost the state hundreds of millions of dollars on debt financed private business projects over the next 20 years under the auspices of public private partnerships. That is why SB 406 failed in committee and failed to receive votes to move it to the Senate floor in the last legislative session. Ultimately, bills such as SB 406 favor businesses inside the business district and those outside must compete with state subsidized businesses. This is something that government should consider carefully before it transfers hundreds of millions of dollars in risk from the developers and businesses that potentially benefit to taxpayers that may or may not benefit. Government should create a level playing field for all businesses with fair taxation and regulation that is reasonable and competitive with other states. This is not to say that government does not have a role in supporting public infrastructure projects like bridges, roads, highways, and water and sewer systems. In fact, in 2019 Montana state government committed $2.7 billion on infrastructure projects all over the state of Montana. You can see a partial list of those projects here. These projects benefit Montana as a whole and each session are approved and funded through natural resources taxes on coal, oil, and gas taxes as well as sales and federal and state income tax dollars. As a legislator, I will be mindful of these types of projects and prioritize my support for the most beneficial to all Montanans.