A still from video recording of Gov. Greg Gianforte's budget press conference on Nov. 11, 2022.

Gov. Greg Gianforte said Thursday the budget proposal he’ll submit to the 2023 Montana Legislature will include more than $1 billion in income and property tax cuts while also using the state’s budget surplus to create a child tax credit, spur housing development and invest in health care and correctional facilities.

Speaking to reporters in the governor’s wing of the Capitol days after the November election delivered his fellow Republicans supermajority control of the state House and Senate, Gianforte said his priorities would bring relief to Montana families and reinforce critical state programs and infrastructure. 

“We’re cutting taxes, holding the line on spending, making our communities and families safer, more secure and stronger,” Gianforte said. “When it comes down to it, our budget is built for hard-working Montana families.”

Specifically, Gianforte said he wants to give Montana homeowners $500 million in property tax relief for their primary residences over the next two years and cut the state’s top income tax rate to 5.9% from its current rate of 6.5%. His budget also gives families with children under the age of six a tax credit of $1,200 per child, per year. 

The governor is also pitching a $200 million investment in a water and sewer infrastructure fund that municipal and county governments can draw from to support housing construction. That proposal, he said, was a response to recommendations developed by his housing task force

Gianforte also said he wants to spend $300 million to shore up the facility and services at the Montana State Hospital, support intensive behavioral health care and outpatient services and boost Medicaid rates for behavioral health care providers. Those proposals would attempt to stabilize the hospital, which is millions of dollars over budget, federally unaccredited and chronically understaffed, as well as support the broader behavioral health system that has long struggled with financial solvency and staffing retention.

“The state hospital is a critical safety net for those who need access to acute inpatient psychiatric care,” Gianforte said. “Let me be clear. We will not close Warm Springs. In fact, we will repair it, better ensure patient and provider safety and improve patient services.”

The full text of the proposed budget will be released Tuesday, Nov. 15. The proposal will provide a starting point for legislative debates over state spending as lawmakers determine how much money to allocate to state agencies for the two-year fiscal biennium that runs from July 2023 to June 2025.

The governor deferred most specific questions about his plans for property tax relief, investments in the state psychiatric hospital and other priorities until next week, when the budget text is available. As such, it wasn’t immediately clear how the property tax relief would be applied to homeowners of different incomes, or how local governments could offset lost local revenue if property taxes are reduced. Gianforte said conversations with local officials will be ongoing.

“Yes, local governments use property taxes to fund schools, law enforcement and roads. But some local governments have been spending at a rate far higher than inflation and population growth,” Gianforte said. “Let me be clear. Local governments should not spend and tax Montanans out of their home.”

Specific items in the governor’s proposal include:

  • Decreasing the state’s top income tax rate to 5.9% from 6.5%
  • Providing Montana property owners $500 million in property tax relief over the next two years
  • A child tax credit of $1,200 per child per year for families with kids under 6 years old
  • A $5,000 adoption tax credit
  • Allocating $300 million to the state’s behavioral health care system, including investments in the Montana State Hospital in Warm Springs
  • Allocating nearly $200 million to repair and expand capacity at the Montana State Prison
  • Providing permanent funding for eight drug treatment courts around the state
  • Allocating $200 million toward local water and sewer infrastructure for municipalities that meet development density goals
  • Allocating $100 million for road and bridge repairs
  • Putting additional money in the state’s rainy day fund and fire suppression fund 
  • Allocating $10 million per year for increased active forest management programs
  • Expanding the state business equipment tax exemption threshold from $300,000 to $1 million
  • Expanding the Montana Trades Education Credit
  • Increasing the cap of the Big Sky Scholarship program and allocating more funding to increase starting teacher pay
  • Funding for 16 new highway patrol officers and criminal investigators and six additional prosecutors in the state Department of Justice
  • Paying off the state’s current general obligation debt by 2023

Editor’s note: This story was corrected Nov. 14 after being initially published with an incorrect byline. It was reported by Mara Silvers and edited by Eric Dietrich.

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Mara writes about health and human services stories happening in local communities, the Montana statehouse and the court system. She also produces the Shared State podcast in collaboration with MTPR and YPR. Before joining Montana Free Press, Mara worked in podcast and radio production at Slate and WNYC. She was born and raised in Helena, MT and graduated from Seattle University in 2016.