Bed-tax hike would fund effort to prevent mussels

A proposal to raise Montana’s bed tax from 7 percent to 10 percent received skepticism during a committee hearing Thursday, despite agreement with its premise to direct money to preventing the spread of invasive mussels in the state.

Sen. Mary Ann Dunwell, D-Helena, is sponsoring House Bill 567, which would double the existing 3-percent accommodations tax, which is assessed on purchases at lodging facilities and campgrounds and currently goes into the state’s general fund. Of that 6 percent, 0.5 percent would be placed in a special account for aquatic invasive species prevention and control.

The state also assesses a separate, 4-percent “lodging tax” on the same purchases, most of which is deposited in accounts to support tourism and marketing for Montana.

Dunwell and Sen. Sue Malek, a Missoula Democrat who also spoke in favor of the bill, told the House Taxation Committee that the additional $30 million the tax bump would generate each year would help defray substantial budget cuts being proposed throughout state government as the Legislature grapples with a recent decline in revenues.

“This bill is an opportunity to invest in Montana families and communities and restore the extreme cuts that are being made to our budget right down the hall in Appropriations,” Dunwell told the committee.

Malek added that while the lodging industry would likely oppose the bill, the revenue could help pay for proposed infrastructure projects in the state.

“They’re a successful, growing industry in Montana, the second-largest in our state at this point, [but] if we don’t have the infrastructure and the environment that people want to visit, then we have a problem,” she said.

Despite the measure’s roughly $300,000 boost to invasive species programs, Montana Trout Unlimited representative Bob Gilbert spoke against the bill, calling it “a thinly veiled attempt, using AIS as a soft point, pumping money into the general fund.”

“It’s a huge increase, and that money could be spent on anything,” Gilbert said. Referring to the programs that Dunwell and Malek said would be supported through the extra general-fund revenue, he added, “That doesn’t mean any of this money’s going there. It means the appropriations committee will decide where it goes.”

The bill was also opposed by the Montana Hospitality and Lodging Association, the Kalispell Chamber of Commerce and the National Federation of Independent Businesses.

Speaking for the Flathead’s largest economic-development group, lobbyist Mark Baker said the bill was one of several “selective sales-tax bills” that provide “a permanent solution to what appears to be a temporary problem.”

Several members of the tax panel also expressed skepticism. Rep. Kerry White, R-Bozeman, included himself among the bipartisan supporters of expanded invasive-species prevention efforts. But he said once he saw that just a small fraction of the money would fund those programs, he grew less excited about Dunwell’s bill.

Dunwell responded that she would be open to supporting amendments that adjust the revenue distribution, and also suggested that a provision could be added that would place a sunset on the increased accommodations tax.

The committee did not immediately schedule executive action on the bill.

Reporter Sam Wilson can be reached at 758-4407 or by email at swilson@dailyinterlake.com.