Budgetting

“Tax Expenditures:

Their Relevance to Montana’s Budget and their

Significance in the 2009 Legislative Session”

A Report by

The Policy Institute

July 16, 2009

Prepared by Bob Decker and Molly Severtson

The Policy Institute blends authoritative research and hands-on political engagement to create

public policy based on economic justice, fair taxation, corporate accountability and

environmental responsibility.

406.442.5506 | P.O. Box 1362 | Helena, MT 59624 | mail@thepolicyinstitute.us | www.thepolicyinstitute.us

TABLE OF CONTENTS

I. Executive Summary

II. Introduction

III. What is a “Tax Expenditure?”

IV. Background of Tax Expenditure Analysis

V. Why Tax Expenditure Analysis Is Important

VI. How the Data is Organized

VII. Findings

Appendix 1 – Tax Expenditure Bills Proposed in the 2009 Legislative Session

Appendix 2 – Tax Expenditure Bill Data

Appendix 3 – Voting Record on Tax Expenditure Bills

Appendix 4 – Web Resources

“Tax Expenditures: Their Relevance to Montana’s Budget and their Significance in the 2009 Legislative Session”

The Policy Institute | July 16, 2009

Page 2

I. EXECUTIVE SUMMARY

ax expenditures have profound and lasting effects on the structure and quality of state

government in Montana, but are little understood by the public and given insufficient attention

by lawmakers. With this in mind, the purpose of this report is twofold: 1) to provide an overview

of the concept of tax expenditure analysis and 2) to analyze the 57 tax expenditure bills introduced in

Montana’s 2009 legislative session.

T

Since a tax reduction for one group always results in either an increased proportional share of tax

responsibility for another group or decreased funding for a public service or program, it is imperative for

citizens to examine the stated policy goals of tax expenditures – both existing and proposed – and to

require that legislators provide reasoned analysis and objective evidence that the tax...