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Senator Fern pitches MITRE tax credit to target middle‑income taxpayers (SB 546)
Summary
Sen. Dave Fern described SB 546 ("MITRE") as a targeted income tax discount intended to increase disposable income for middle‑income Montanans through a phased, income‑sensitive credit; DOR fiscal staff and opponents warned of a substantial annual cost and implementation complexity.
Senator Dave Fern opened the hearing on Senate Bill 546, a proposal he called MITRE (Middle Income Tax Reduction) that would provide a phased taxable‑income‑based tax discount aimed at middle‑income filers. Fern said the measure uses a 4.7% base factor that phases down as Montana taxable income rises and is intended to place money in the hands of middle‑income workers to spur local economic activity.
Sam Schaefer from the legislative fiscal division walked through charts the sponsor provided showing how the credit would peak for certain deciles and how the department estimated the credit’s size for single and joint filers. Fern told the committee he expected a fiscal note in the vicinity of $200 million per year. Department of Revenue staff and the fiscal division said they would produce a formal fiscal note and implementation analysis for executive action and that resource needs for implementation would be evaluated when the fiscal note was complete.
Opponents included the Montana Society of CPAs and Rose Bender of the Montana Budget and Policy Center. The CPAs objected to using a complex tax credit mechanism rather than a simpler rate change or broad reform; Bender said the bill would create a large, sustained revenue loss that could worsen an already negative structural budget balance in later years.
Senator Fern argued the credit is narrowly targeted and could be paired with property‑tax reforms to deliver meaningful relief to a typical middle‑class household. Committee members asked about administrative complexity, nonresident eligibility, and whether the credit would be refundable; Fern said the design accounts for nonresidents and that department staff would implement the mechanics. No committee final action on SB 546 appears in this transcript excerpt.
