Senate committee hears bill to fund property‑tax credits by redirecting lodging and rental taxes; tourism and business groups urge no

Sen. Carl Glimm (R‑Flathead) told the Senate Local Government Committee that Senate Bill 90 is "an attempt to bring some property tax relief to the citizens of Montana" by redirecting portions of the lodging sales tax, lodging facility use tax and rental vehicle tax into a state special revenue account that would pay a credit to primary residence owners. Glimm cited fiscal‑note estimates that "each primary residence would receive a tax credit of $436.97," and said the approach would reallocate about $90 million in tourism‑related tax receipts.

Mandy Rambo, deputy director at the Montana Department of Commerce, testified in opposition and said the bill "is not the answer," warning of significant programmatic and economic consequences if lodging‑tax funding for tourism marketing, grants and heritage programs were diverted. Rambo told senators the department tracks numerous programs supported by lodging taxes — grants for rural and under‑visited communities, agritourism grants, Main Street Montana, Made in Montana marketing, the Montana Heritage Commission, the Institute for Tourism and Recreation Research (ITRR) at the University of Montana and other programs — and said replacing state marketing would likely reduce visitation and revenue over time. Rambo cited a Colorado example from the 1990s in which suspension of statewide marketing led to steep declines in visitation and said tourism supports roughly one in 12 Montana jobs and more than $5 billion in economic activity.

Diane Medler of Discover Kalispell and representatives of the Montana Chamber of Commerce, Glacier Country, the Montana Lodging and Hospitality Association, Montana Outfitters and Guides, rural chambers and many Main Street and heritage groups opposed the bill. Their testimony emphasized that departments, regional tourism organizations, small hoteliers, outfitters, agritourism operators, and rural festivals rely on state marketing, research (ITRR) and matching grants. Diane Medler described ITRR as providing essential, localized data: "ITRR collects and analyzes tourism counts and spending data trends and resident attitudes towards tourism," she said, and noted the data are used by destination organizations and small communities.

Opponents warned that cutting marketing and grant programs would reduce visitation to rural and smaller communities that cannot market themselves, damage heritage‑site operations funded through the Montana Heritage Commission, and strain local economies. Preserve Montana and the Montana Heritage Commission said the bill would imperil maintenance and operations of historic properties (including Virginia City and Nevada City) and cut roughly $600,000 from the Heritage Commission's budget, a quarter of its operating funds, according to testimony.

Business owners and local leaders from across the state described concrete effects: a Billings hotel manager said many local businesses and workers rely on tourism traffic; a Polson hotel manager and MLHA board chair explained how occupancy is uneven across seasons and that bed tax growth reflects rate increases and remittance reforms; agritourism and Made in Montana participants said the programs help small producers and create rural economic activity; and film and production witnesses described the film office and production impacts.

Supporters of the sponsor's intent said property taxes are a serious issue and requested consideration, but most witnesses urged the committee to find alternatives and not to redirect bed‑tax funds. Several speakers suggested other models — such as broader tax reform, sales taxes, or targeted property tax relief bills introduced elsewhere this session — rather than redirecting tourism funding.

No committee action was taken at the hearing; the sponsor said he would accept amendments but did not present any at the hearing.

Why it matters: SB 90 would reallocate existing tourism‑related tax revenue to finance a direct credit to homeowners. The opponents argued doing so would shrink the larger tourism economy that generates jobs, supports small towns and funds statewide research and grant programs used to disperse visitors across Montana.

What comes next: Committee members asked detailed questions of Department of Revenue and Commerce staff; the sponsor indicated willingness to accept amendments. The committee did not vote and said it would schedule executive action later if time permits.