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House committee hears mixed testimony on repeal of state tax on Social Security
Summary
Supporters urged eliminating Montana’s tax on Social Security benefits; budget and labor groups warned the fiscal note shows large revenue loss. No committee vote was taken.
House Bill 148, a proposal to exempt Social Security benefits from Montana state income tax, drew proponents who called the tax unfair to retirees and opponents who cited a large fiscal impact and risks to state services. The Appropriations Committee closed the hearing without taking a vote.
Representative Marshall, sponsor of HB 148, described the bill briefly and asked the committee for a due pass. Proponents included Fran Viereck, a longtime AARP Montana volunteer, who described paying state income tax on Social Security for 15 years and urged relief for seniors. Richard Bennett of Bozeman, a retiree, said Montana’s tax on Social Security represents ‘‘a triple tax’’ after payroll and federal taxation and urged either immediate repeal or an accelerated phase-out rather than the delayed schedule he said was in the amended bill.
Opponents included Rose Bender of the Montana Budget and Policy Center, who cited the fiscal note and testified that the bill would phase in annual state revenue losses approaching “nearly $150,000,000 each year.” Bender noted exemptions already in statute for low-income households and argued that broad tax cuts threaten services for Montanans who rely on state-funded programs. Amanda Curtis, president of the Montana Federation of Public Employees, said employees in education, health care and public safety worry that tax cuts affecting the state’s revenue base could harm services for vulnerable Montanans.
Erin McNay of the Department of Revenue offered to answer questions about the fiscal note; committee members asked clarifying questions about at what income levels Social Security becomes taxable and about details in the fiscal assumptions. Representative Falk asked for the threshold at which couples aged 65 and over would begin to pay state tax; an exchange in committee referenced a rough estimate that couples with total income near $100,000 would not pay state income tax after deductions, but committee members characterized that as an approximation and asked the Department of Revenue for detailed calculations.
No formal committee motion or vote was recorded for HB 148; the chair closed the public hearing after questions and testimony and moved to the next agenda item. Committee members and witnesses frequently referenced the fiscal note during debate; committee discussion focused on balancing relief for retirees with the fiscal impact on state services.
