State Legislature 2024: SD26-Tom McGillvray (R)

What are your three most important policy priorities? What do you hope the impact of implementing these policies will be?

Property tax reduction: Lower residential property taxes for homeowners and increase housing affordability.
Provide state help to aid Billings be a safer community. The impact is to enhance public safety by deterring crime and incarcerating drug dealers, sex traffickers and other offenders.
A state resolution for a federal fiscal restraint amendment: Keep American from failing financially, inflation reduction.

In a recent survey of our members, an overwhelming portion of respondents (96%) agreed or strongly agreed with the statement: “Reducing the cost of doing business in Montana generally benefits all Montanans.” What do you hope the Legislature will do to reduce the cost of doing business in Montana?

We can reduce red tape regulations that cause impediments to business efficiency. The Governor will have more bills on this subject in 2025. We can do more to create affordable housing. If housing costs are high, wages have to be higher to support home ownership or renting. We can cut taxes, like the business equipment tax. This will attract more business and create higher tax revenues. Reduce crime which will enhance Billings’ reputation for being a safe community. This helps attract a competent workforce which saves money for businesses in recruiting, training, and retention. I will be working on all of these items and more in the 2025 session.

In our recent survey, public safety was identified as the number one policy issue for our members. During the 2023 Session, important bills to update the antiquated Youth Court Act and revise theft laws both narrowly failed. We expect those and other safety bills to come up during the 2025 Session. What legislative changes would you suggest to address safety issues in Billings and around the state?

Continue to increase state beds for offenders. This will reduce the number of state prisoners in county jails allowing more space for county offenders.
I will continue to support increasing penalties for theft (this also increases the need for jail space). This bill passed last session. It died due to a premature sine die motion which I did not support.
I am on Finance and Claims, Section D. (Section D sets the budget for Corrections, Dept. of Justice, Office of Public Defender, and the Judicial Branch. As a member of this committee, I support adding state DCI agents (including replacing the ARPA funded ones Billings will lose) for narcotics and sex trafficking and general law enforcement.

Last session, the Montana Legislature passed numerous bipartisan housing bills, reforming onerous regulations that restrict housing supply and appropriating an historic amount of funding for housing. Considering how much was accomplished, it was dubbed the “Montana Miracle.” However, the work is not done, and more recommendations are coming forward from the Governor’s Housing Task Force. Which recommendations to add housing supply and make housing more affordable will you consider supporting?

I read the regulatory reforms such as reducing minimum lot sizes, parking size mandates and the reduction of building code mandates to increase affordable housing while still maintaining safety and quality. Most of the recommendations eliminate redundant and unnecessary barriers to affordable housing. I generally support them all and will take each vote on a case by case basis as I see the specific legislation.

Over the last two sessions, the Montana Legislature took significant steps to reduce the business equipment tax, relieving 502 Yellowstone County businesses from the burden of paying this tax. Would you be supportive of further reductions, allowing even more businesses to keep more of their hard-earned dollars?

Yes, or its elimination. Business Equipment is taxed at 0% for the first $1 million of property then 1.5% on the next $6 million and then 3% after that. The total raised was about $85 million in 2022. It is a barrier to adding new businesses and jobs which increase income tax revenue which can be used to backfill the lost business equipment tax revenue. Montana would have more tax revenue without this tax.

Reauthorizing Medicaid Expansion will be a major topic of debate in the upcoming session. Originally passed in 2015, the program provides significant benefits to Yellowstone County, creating over 1,500 jobs and providing healthcare coverage to approximately 10% of our local workforce. Are you supportive of reauthorization? With changes? Not at all?

Medicaid Expansion clearly provides benefits. But what is the economic and social opportunity cost? You cannot look at Billings or Montana in isolation without examining the fiscal problems faced by the United States. Here are a number of items the Chamber should consider:

Is it affordable at the federal level? Interest payments on federal debt have grown by 140% in the last 3 years. Federal debt payments now exceed what is spent on defense and Medicare, the former two highest costs items for the federal government. Some analysists suggest that 40-60% (or more depending on interest rates) of federal revenue could be allocated to debt service by 2030 if rates continue to stay higher for longer. Deficits are consistently running at about $2 trillion per year. When the federal government cuts, where will they cut? Do they cut a program that provides a 90% match to states (Medicaid Expansion) which supports able bodied non-working adults to have free healthcare, or do you cut a program that gives a 65% match (traditional Medicaid) that supports children in poverty, the aged, infirmed, mentally, and physically impaired and cannot work? Medicaid expansion is the low hanging fruit when the federal government MUST reduce spending. Montana must prepare for this eventuality.
There are better alternatives. Consider providing working people with a direct primary care doctor with a co-pay (cost is $840 per year in Billings). I carried and had signed into law two bills last session that made health care more affordable. SB 112 and SB 564, which provide pharmacists with limited prescribing authority and free healthcare options for the poor. Poverty spending (including Medicaid), has risen from $1,612 per person in 1967 to $32,031 per person in 2022. In spite of that, poverty rates have not fallen. We need to look at alternatives. What we are doing is not working.
Medicaid Expansion discourages work and moving up in family income. The benefit cliffs created by Medicaid Expansion combined with other programs can create disincentives to work and productivity. American and Montana will face a labor shortage (AI aside) in the future. We need able bodied working adults in the work force.
Fraud: Medicaid Expansion fraud contributed to $98 billion to deficits in 2021. Improper payments in Expansion amount to over 20% of payments. Fraud, waste, and abuse in the federal government must be addressed in each program. Improper payments totaled over $230 billion in 2023, much of it in Medicaid and Medicare.
If Medicaid Expansion passes, it should have contingencies that eliminate the program when the match is reduced or eliminated. Montana should work now on viable alternatives at less cost. Currently there are 82,000 adults enrolled in Medicaid Expansion. Each one could be provided a direct primary care doctor for less cost than the state share of Medicaid Expansion.

Tax Increment Financing (TIF) is consistently a topic at the Legislature, with supporters arguing it is one of the only economic development tools available to local communities in Montana, while some opponents contend it should be eliminated. The Billings Chamber has long been a strong supporter but acknowledges there could be room for improvement. What are your thoughts on TIF?

I support TIF districts. However, some things to consider on TIF districts recommended by the Governors Property tax task force: Definition of blight, review the number of years a TIF district can exist and consider a reset of TIF increment base periodically that is distributed for existing homeowner property tax reductions.

Considering the concern over recent property tax increases, the Governor established a Property Tax Task Force to offer recommendations for dealing with increasing property taxes. Which of the 12 recommendations, or other solutions, would you support to address property tax concerns?

Here are at least five I support:

A homestead exemption by reducing the property tax rate from 1.35% to 1.1% for most primary Montana residences. See here for examples of how this would work.
Require a higher threshold than 50+% to pass a voted mill levy.
Suset voted levies for reconsideration.
Require voted levies to be in dollar amounts vs. mills.
Study Special districts to determine their usage, and potential for abuse to offload general fund expenses into special districts. Special districts are approximately 10% of current property tax bills.