Democratic opposition may stymie Gianforte’s child tax credit push

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As the dust settles on a key procedural deadline for this session’s batch of budget bills, it’s become apparent that House Democrats may play a key role in scuttling one of the most progressive parts of Gov. Greg Gianforte’s proposed state budget — a $1,200-per-child tax credit.

While the governor maintains that the tax credit — a key piece of what he calls his conservative, pro-family budget — can still be revived if Democrats get on board, the initial bill to implement it is now sunk, with Democrats saying Republicans haven’t given enough ground to Democratic bills tackling housing, childcare and mental health.

As introduced, House Bill 268 would have offered the credits to families with incomes up to $50,000 for each child 5 or younger, costing the state about $33 million a year. It initially received a warm, bipartisan reception in the Legislature, skating through the House Taxation Committee and winning broad bipartisan support in a preliminary vote on the House floor.

In the House Appropriations Committee, however, it floundered as Democrats and hardline Republicans voted it down Feb. 23. It was opposed there by nine of 16 Republicans and five of seven Democrats, meaning minority-party Democrats could have swung the vote in favor of advancing the bill.

House Minority Leader Kim Abbott, D-Helena, told reporters the following day that Democrats were using appropriations committee votes as leverage in negotiations as they pushed for legislative action on housing, childcare and mental health programs.

“I think the folks in appropriations are taking up some space right now on proposals because we have priorities,” Abbott said. “If people are expecting our votes to move priorities, even if we like them, we need our priorities funded too.”

For his part, the governor has pushed for passage of the tax credit and another stalled bill that would have created a disaster resiliency fund. At a March 2 press conference, his office distributed vote sheets identifying the lawmakers who had voted against his bills.

“These legislators are stalling this pro-family, pro-growth tax cut,” he said.

Budget bills initially introduced in the House were required to pass the chamber by Tuesday afternoon, a deadline that allows time for Senate-side debate before the session ends in late April or early May. With the child tax credit still mired in the appropriations committee, that sealed the bill’s fate for the session, though its provisions could still be amended into another bill as part of last-ditch negotiations.

Gianforte said at a Thursday press conference that he is hopeful that could still happen.

“Nothing is dead until the Legislature is done, and we still have time on the clock,” Gianforte said, “so I’m hopeful we can revive this child tax credit so we can get help to working families.”

One of the representatives who voted to table the bill, Rep. Emma Kerr-Carpenter, D-Billings, said this week that she was frustrated by some of the provisions that had been amended into the bill, such as a work requirement, and worried that it would be used by the governor’s office to justify inaction on Democrats’ priorities.

“If it came back without strings attached, I’d be for it, or I’d be a lot more for it,” she said. “And also if I knew it wasn’t going to be used as some sort of shield to avoid doing other things for families.”

Abbott also defended Democrats’ vote against the bill this week, saying they would have preferred to expand the state’s version of the federal earned income tax credit and that they were concerned the governor’s office was presenting the child tax credit as a solution to childcare affordability.

A modest expansion of the earned income tax credit was signed into law alongside Gianforte’s top-bracket income tax rate cuts earlier this year, though a Democratic push for further expansion garnered little traction. A Democrat-sponsored bill that would make more families eligible for the state’s Best Beginnings child care scholarship program is still alive after passing the House this week.

Even with that child care bill advancing, Abbott argued Republicans haven’t done enough to address what Democrats consider must-tackle issues for this year’s Legislature.

“Democrats have proposed solution after solution that would give relief, both in terms of tax — property tax and income tax — and in terms of access to childcare,” Abbott said, adding that Republicans have voted most of those bills down.

Gianforte argued Thursday that legislative Republicans are voting forward bills that try to address housing, child care and mental health challenges. Not all Republican bills on those issues, of course, have won Democrats’ support.

“Republicans in the Legislature are making progress on all three of these priorities,” Gianforte said. “It’s now time for the minority leader to step forward.”