Montana governor blocks GOP-backed tax relief bills to preserve $300 million state surplus

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HELENA, Montana — Three Republican tax relief bills have died at the pen of Montana's Democratic governor this year.

The state House and Senate GOP caucuses touted tax cuts as a high priority for the 2015 session, but every major tax initiative that was passed out of the Republican-controlled Legislature has been vetoed by Gov. Steve Bullock.

The first-term governor took similar action during the 2013 session. He said he wants to head-off irresponsible and unfair proposals that would eat away at the state's $300 million surplus.

Bullock shot down the last of three principal tax proposals from Republicans on Monday. The other two vetoes came earlier this year on proposals to cut income taxes by 0.1 percent to 0.2 percent for every bracket.

The latest tax veto targeted a measure from Sen. Bruce Tutvedt of Kalispell that would have replaced Montana's seven income tax brackets with two tax rates and based capital gains taxes on those rates.

It would have cost the state about $28 million in tax revenue over the next two years, and about $10 million annually beginning in 2018.

Supporters commended Senate Bill 171 because it would simplify the state's tax code and save most taxpayers money. But Bullock said in a statement that it would also raise income taxes for 17 percent of Montanans and eliminate some energy tax credits.

"Simplification is a laudable goal, but unfortunately SB 171 raises more issues than it resolves," Bullock wrote in a letter explaining his veto.

The Montana Republican Party issued a statement criticizing Bullock for refusing to give any tax dollars back to workers.

"I hope that everyone recognizes the governor's move on SB 171 for what it really is, adherence to an ideology," Senate President Debby Barrett, R-Dillon, said in a statement.

Barrett called Montana's current tax system convoluted and said the final of three Republican tax relief bills would have improved the state's business climate.

Montana is currently ranked by The Tax Foundation as the sixth-best tax climate for business in the nation.

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