More Spending, More Problems

Montana currently places no limits on the growth of local government spending, and prudent limits on local spending growth would go a long way to protect the taxpayer.

Often the masses are plundered, and do not know it. – Frederic Bastiat

My latest column in Lee Newspapers discussing the need for prudent limits on state and local government spending has sparked quite the discussion online.

I was pleasantly surprised to receive several messages from city councilmembers across the state stating they agree that government spending must be reined in to protect taxpayers. One council member made an astute point:

“If you want to address the impacts of local government spending, you must also look at assessments and other charges. Local electeds across Montana have become all-too-comfortable ‘assessing’ when they are actually taxing.”

In his particular jurisdiction, property taxes have increased 10% in the last 3 fiscal years, but assessments have increased by almost 60%.

He goes on to say:

“Property taxes are capped by MCA, local charter (often) and the will of the public if the local government wishes to exceed statutory limitations. Assessments are only subject to the fiscal restraint of the local governing body, which is usually non-existent.”

He makes an excellent point here. No matter how governments may be restrained in collecting taxes, if spending growth is left unchecked they will always find more creative ways to increase revenue – whether that be through property taxes, assessments, fees or something else.

This is also one reason why I advocate for responsible limits on government spending growth as the first step to getting taxes under control.

Taxes follow spending. If governments responsibly restrained budget growth, there would be less need for revenue in the form of taxes, assessments, and fees. We might even see tax cuts!

Montana currently places no limits on the growth of local government spending, and prudent limits on local spending growth would go a long way to protect the taxpayer.

For Liberty,

Kendall Cotton

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The Latest

1. Earlier this week, Frontier Institute voiced support for HB 231 from Rep. Matt Regier of Kalispell. HB 231 follows Frontier Institute’s recommendations for lawmakers to repeal Montana’s Certificate of Need (CON) program. Under the CON program, the government gets to determine if a new health care business is “needed,” a process that has been shown to limit healthcare competition which could give Montanans more choices and lower costs. Check out our statement of support HERE.

2. In his State of the State address, Governor Gianforte called for reducing taxes to make Montana a more attractive place for entrepreneurs to move here and start businesses. Many posed the question online – do lower taxes really motivate people to move?

Our Take:

There is clear evidence of increased migration from high tax states to low tax states. Of note, this trend intensifies if you only look at high-earners, who often bring their businesses with them as they relocate. Lowering Montana’s tax burden is a no-brainer to attract entrepreneurs and businesses to our state. Economic growth as a result of tax cuts leads to more tax revenue.

3. We enjoyed participating in the University of Montana’s Economic Outlook Summit as a Sponsor earlier this week. The conference featured fascinating analysis of Montana’s economy – and I was honored to join the discussion as a panelist. The Summit’s keynote, Professor Edward Glaeser of Harvard, called for a focus on creating a functional government to help our economy grow – one that doesn’t put too many barriers in the way of people starting businesses, getting jobs, or building houses. I couldn’t agree more.