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Senate hearing on SB 90 exposes broad opposition as sponsor seeks to divert bed and rental car taxes to property tax credits
Summary
Senate Local Government heard hours of testimony on SB 90, which would divert lodging and rental-car tax revenue to create a statewide property tax credit (estimated $436.97 per primary residence from a projected $90M pool). Department of Commerce, tourism regions, chambers, outfitters, heritage and Main Street advocates warned the diversion would decimate marketing, grant programs and research (ITRR), with widespread rural impacts. Committee deferred executive action.
Senator Carl Glim presented Senate Bill 90, a proposal to redirect portions of the lodging sales tax, lodging facility use tax and rental vehicle tax into a state special revenue account to fund a residential property tax credit. Glim said the fiscal note estimated roughly $90,000,000 would be available and that the estimated average credit per primary residence would be about $436.97. "What we're gonna pull out of that tax is about $90,000,000 in total," the sponsor said.
The Montana Department of Commerce (Deputy Director Mandy Rambo) testified in opposition and detailed widespread programmatic impacts if those revenues were diverted. Rambo said SB 90 "is not the answer," warning the bill would end statewide tourism marketing, reduce grants that support rural events and small businesses, shutter the Institute for Tourism and Recreation Research (ITRR) at the University of Montana and cut Montana Heritage Commission and Main Street program support. Rambo and other witnesses cited past examples (Colorado, early 1990s) and told the committee that eliminating statewide promotion led to significant visitation and revenue declines in other states.
Representatives from the Montana Chamber of Commerce, regional destination marketing organizations (Visit Southwest Montana, Discover Kalispell, Visit Big Sky), the Montana Lodging & Hospitality Association, outfitter and guide associations, Made in Montana and agritourism advocates, and local chambers and Main Street communities provided extensive opposition testimony. Witnesses gave concrete examples of projects, jobs and grants that rely on lodging-tax distributions: event grants, agritourism grants, Main Street façade and wayfinding projects, heritage preservation operations (Virginia City, Nevada City, Reader's Alley), the Big Sky Resort Area District, and film/production support. Several witnesses quantified local impacts — the Montana Heritage Commission executive director said the bill would cut roughly $600,000 from the commission's budget and exacerbate miles of deferred maintenance.
Opponents repeatedly warned about a negative feedback loop: reduced marketing would lower visitation and bed-tax collections, shrinking the pool available for property-tax credits and eroding the long-term fiscal efficacy of the proposal. Multiple witnesses argued the bill would disproportionally harm rural and under-resourced communities that rely on state grants and marketing to attract visitors.
Committee members asked technical questions about the fiscal note and which specific programs in Section F would be eliminated; Department witnesses confirmed some grant programs and marketing allocations would be removed as written. Sponsor Glim acknowledged the magnitude of opposition but urged the committee to consider homeowners' property-tax pain and asked for a due pass. The committee adjourned without executive action and said executive action would be scheduled later.
