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House advances broad income-tax reduction bill after failed sunset amendment
Summary
On April 1 the Montana House advanced House Bill 337 — a wide-ranging income-tax reduction — after rejecting a proposed sunset amendment. Sponsors argued it lowers tax burdens across brackets; opponents raised concerns about multi-year fiscal impacts cited in the bill's fiscal note.
House Bill 337, a broad income-tax package presented April 1 on the House floor in Helena, would lower the top marginal rate and raise taxable-income thresholds to reduce taxes across income brackets while increasing the earned-income tax credit. Representative Lear, speaking as the bill sponsor, said the measure reduces the top rate to 5.4 percent over the biennium and raises the breakpoint for the 4.7 percent bracket from roughly $40,000 to about $100,000 to benefit lower- and middle-income Montanans.
Representative Taine moved an amendment (HB337.002.001) that would insert a sunset date of Dec. 31, 2028; Taine argued the legislature should reassess fiscal balance after the 2028 session because the bill's fiscal note projects substantial revenue reductions (he cited roughly $190 million in FY2027 and about $267 million in FY2028). The Speaker and other members called the amendment "unfriendly"; opponents argued returning money to taxpayers was a conservative position. The amendment was defeated on a recorded vote, 42–58.
After debate, Representative Lear closed and the committee recommended HB337 "do pass" on second reading. The clerk recorded a committee floor tally of 58–42 in favor of recommending passage on second reading.
Why it matters: Floor sponsors say HB337 reduces Montana's tax burden statewide; critics say the bill's multi-year revenue reductions could push the state out of structural balance without mitigation. The fiscal-note numbers cited on the floor—if accurate and unchanged—represent a multi-hundred-million-dollar reduction in ongoing revenue and therefore matter for future budget decisions.
What comes next: The bill was recommended on second reading and remains subject to further floor action, possible amendment, and reconciliation steps before final enactment. Lawmakers on the floor also re-referred a large number of measures to the Appropriations Committee, indicating scrutiny of fiscal impacts will continue.
