Gianforte's proposed budget slashes state income tax

Gov. Greg Gianforte said Wednesday the biennial budget proposal he will submit to the 2025 Legislature will include the largest tax relief in Montana’s history, while focusing on investments in public safety, education and infrastructure.

Holding a press conference at the state Capitol just a week after being reelected for a second term, Gianforte emphasized that by electing Republicans to all state and federal offices, as well as retaining GOP control in both legislative chambers, Montanans showed they want conservative leadership in the state.

“My proposition was, and remains, simple — to create more good paying jobs, open the doors of greater opportunities for all Montanans to achieve the American dream and to protect the Montana way of life. It’s a conservative vision centered on family, our communities and our way of life,” Gianforte said. “That conservative vision is what has guided our budget that we are previewing today.”

Outlining a budget built around security and prosperity for Montanan, Gianforte unveiled a pillar of his proposal to keep more money in the hands of Montanans by slashing the state’s top income tax rate from 5.9% to 4.9% over two years. His administration has lowered the top income tax rate, paid by individuals making more than $21,100, each biennium since he took office.

“We can’t and shouldn’t rest on our laurels,” Gianforte said. “That’s why my budget, this new budget, includes the largest income tax cut in state history.”

With an additional proposed expansion of the earned income tax credit, Gianforte’s plan would provide more than $850 million in permanent tax relief, he said. In addition, he proposed raising the business equipment tax exemption to $3 million, and ending the 3% administrative fee on vehicle registrations, the latter of which is estimated to save Montanans $6 million annually.

Gianforte also highlighted his plans to provide property tax relief by pursing “most of” the recommendations made by the property tax task force he established this year. The centerpiece of the package is a homestead rate cut that is estimated to lower property taxes by 15% on Montanans’ primary residence, as well as 18% on small businesses. The rate cut is projected to affect more than 200,000 primary residences and 33,000 businesses across the state. The governor said the tax burden will shift to individuals who own second homes in the state.

“Since I think we should deliver permanent property tax relief for Montanans in 2025 — not in 2026 or 2027 but in 2025 — getting this proposal across the finish line as quickly as possible is one of my top priorities in the upcoming legislative session. We need to get it done early,” Gianforte said.

THE GOVERNOR is proposing to pair property tax relief with large investments in public safety, education and infrastructure.

Touting a budget that “backs the blue,” Gianforte announced several big investments in law enforcement and corrections.

Among the budget proposals are $8 million for the Montana Highway Patrol to boost pay and invest in equipment and $6.5 million for corrections officers. Additional funding will support more prosecutors and DNA forensic scientists at the Montana Department of Justice, additional judges to help with caseloads, and increased victim support resources, the governor said.

Building on the Healing and Ending Addiction Through Recovery and Treatment initiative, a central tenet of his time in office, Gianforte’s budget will allocate $8 million for communities to address the opioid crisis and invest nearly $2 million in drug treatment courts.

Another large one-time expenditure will allocate $150 million to expand the state prison by building two additional pods that will add roughly 500 additional beds.

“Providing law enforcement with the tools they need to get their job done, however, doesn’t maximize public safety if we can’t put criminals away,” Gianforte said. “The fact is, too many criminals who ought to be at the state prison are filling up county jails. The fact is that there are thousands of unserved warrants because there’s not enough jail space for criminals. For the safety of our communities, we must fix this.”

GIANFORTE ALSO highlighted a need to invest in public K-12 education and enact a “pro-student, pro-parent, pro-teacher education agenda.”

“Ultimately, we must ensure students and parents have access to the best education possible. That includes ensuring our teachers are paid for their work, because a worker is due the wages, and teaching is one of the most noble and rewarding professions there is,” he said.

The proposed budget includes more than $100 million to boost teacher pay, with a focus on new educators, through the TEACH Act, and increases the cap on the Big Sky Scholarship program.

In what is expected to be a strong focus during his next term in office, Gianforte also spoke about the importance of keeping kids focused while in school by removing distractions from cell phones. His budget includes $1 million to incentivize school districts to adopt phone-free policies.

Another one-time expense will allocate $81 million to the school facilities trust to address deferred maintenance and infrastructure upgrades.

“A public school system designed for effective teaching and learning is just one of the keys to developing a stronger, brighter future here in Montana,” Gianforte said.

Gianforte also highlighted additional big-picture spending goals, including helping boost housing supply, shoring up the state’s infrastructure and protecting state pensions. He added that the full budget, which will be released on Friday, will also include funding to renew Medicaid expansion, though the governor also said that renewal should come along with work requirements.

“Our budget prioritizes the health and wellbeing of our communities and most importantly, the next generation of Montanans,” Gianforte said. “Our budget keeps spending growth well below inflation. Our budget has a strong ending fund balance to protect against economic and financial uncertainty. Our budget avoids cuts and essential services. This is our path to security and prosperity.”

The governor’s full budget will be released on Friday.