The Session Focuses on Money, Money, Money! Legislative Bulletin #10
In this bulletin:
• Affordable workforce housing came to the forefront this week as three bills that would encourage investments and construction were heard in the House Taxation Committee (HB 829, HB 819, HB 825). Additionally, a sweeping rewrite and streamlining of Montana’s Land Use Planning code (SB 382) was heard in House Local Government.
• In the Senate, three bills that undercut the security of renters in a hot rental market were heard in Senate Local Government (HB 282, HB 488, HB 731).
• A gobsmacking surprise rounded out the week when the Dept. of Public Health and Human Services came into House Appropriations asking for $150 million (HB 835, Keenan) to help it cover a large shortfall due to skyrocketing costs for its institutions, especially the State Hospital at Warm Springs and its unanticipated Medicaid caseloads. The Department explained that extraordinary workforce challenges, inflation, and failure to adequately estimate and anticipate these costs at the end of the 2021 legislature led to significant shortfalls. It will need $150 million to close the books on the current biennium on June 30, and to make it through the coming biennium.
• House Bill 2, the state’s biennium budget bill, left the House and was transmitted to the Senate without the benchmark provider rates recommended by the Guidehouse study as the absolute minimum needed to keep nursing homes and group homes (et al.) from closing their doors at the end of this fiscal year.
• Ongoing middle-class tax reforms are not doing well.
Money on the table for Affordable Housing?
While the Governor and the majority party would like to see housing issues fixed with regulatory tweaks and deregulation of land use planning and zoning laws, even drastic weakening of these laws would not address the massive shortfalls in worker housing across dozens of Montana communities.
This week, three bills joined HB 574, Rep. Kim Abbott’s Workforce Housing Trust Fund bill to invest $500 million of Montana’s surplus dollars to establish a trust fund dedicated to housing needs now and in the future. (See March 12 bulletin.)
HB 829 - (Nikolakakos, R-Great Falls) - Establish a Montana workforce housing tax credit
We support this bill.
This bill would make $1.5 million in workforce tax credits available each year for 6 years to help incentivize and leverage tens of millions more in private sector investments.
This is a well-established and well-honed tool, already being used in 24 states because it gives developers a key asset as they put together financing for housing that workers can afford to rent.
In many parts of Montana, workers are priced out of local markets and must commute miles away from where they can afford to rent.
Likewise, seniors are driven out of communities they have lived in and loved for decades as they downsize on fixed incomes and cannot afford the high local rents in a Bozeman or Missoula market.
The funds would be administered under the Montana Board of Housing, which has extensive experience in dispersing federal low-income housing tax credits, but each year must turn away 3 out of 4 good projects.
HB 825 - (Hopkins, R-Missoula) - The Montana Home Ownership Means Economic Security Act (HOMES) Act
We support this bill.
This would transfer $200 million into the Montana housing infrastructure principal account.
The earnings would be used for planning grants to local governments and to facilitate low interest bonds for public infrastructure (water, sewer, roads, etc.) that serves affordable housing construction.
It is part of the Governor’s housing package.
HB 819 - (Green, R-Hardin) - Create Montana community reinvestment act to support workforce housing.
This bill creates a reinvestment fund with a $50 million one-time only investment by the State which might be supplemented by private donors or employers.
The fund would be used to buy down the cost of mortgages (deed-restricted) to allow affordable home ownership for middle income workers.
It would be administered under the Board of Investments.
The bill had broad support from business and banking sectors, as did the previous two bills. It was described as “novel” and “unique” in the hearing, even by proponents.
It might prove challenging to set up but might open some pathways to home ownership for young families and professionals.
We have not taken a position on this bill. We will continue to follow HB 819 as it takes shape, and major amendments are discussed.
SB 382 (Mandeville) - Create the Montana Land Use Planning Act
We support this bill.
This is the work of multiple stakeholders over two years to streamline and address some of the barriers and costs to developers of much needed housing, while recognizing the authority, vital public health and public participation concerns and responsibilities of elected local governments.
HB 282 (Galloway) was written about in this Bulletin as it passed through the House. It was heard this week along with two other bills, HB 488 and HB 731, from the same sponsor that curtail renters' rights.
Many seniors have downsized from a larger home to a rental as they struggle to get by on a fixed and reduced income. As Montana rental markets skyrocket, and landlords wish to extract higher rents, it could be tempting to try to move current renters out quickly to bring in greater revenues. These bills would pave the way.
For a deep dive into these bills, please see these fact sheets detailing the dramatic reductions in timelines and rights for renters facing eviction. These fact sheets were prepared with assistance of the Montana Legal Services who often represent low-income renters in small claims courts. HB 282 HB488 HB731
Action Item! The bills were heard in Senate Local Government on Wednesday. Please send a note to the Senate Local Government Committee and ask them to vote no on these bad bills.
State Health Department requests $150 million so it can close its books on 2023!
HB 835 (Keenan) Reciting a litany of reasons not at all unfamiliar to the desperate providers who have been testifying all session in front of the House Appropriations Committee -- such as vanishing work force, expensive and unanticipated traveling nursing costs, high inflation, too-low budgeted authorization set by the 2021 legislature, lingering pandemic after-effects -- the Department of Public Health and Human Services is asking for $150 million to cover its 2023 expenses and to cover the much higher Medicaid caseloads that were not adequately anticipated in either the 2021 or the 2023 session.
I needed to pick my jaw up from the floor after the hearing on HB 835, not because the bill isn’t quite possibly warranted, but because it is exactly the PICKLE that providers of senior long-term care and group homes, and other critical human services in desperate straits, have been describing to the committee for the past eight weeks. As yet, without success.
Waiting until HB 2 was transmitted to the Senate to ask for this $150 million was audacious on the part of the Administration. The bill's sponsor Rep. Bob Keenan has so far staunchly resisted funding the minimum benchmark needed to keep nursing homes and other providers functioning.
On Monday the Committee gave HB 835 a haircut by retaining the shortfalls it needed ($56 million) to close out its books for the 2023 biennium and removing the Department's request for another $100 million to deal with Medicaid caseloads in the upcoming biennium. That issue can be dealt with when the Senate deliberates on HB 2.
Update: HB 649 (Caferro) to fully fund provider rates, which amounts to approximately $25 million of General Fund matched by $50 million in Federal money, is still pending action in the House Appropriations Committee. We hope the committee will agree that what is good for the goose is good for the gander and back these vital services and providers.
Middle class ongoing tax reforms on life support or dead!
Ongoing tax reform to help seniors is faring poorly.
-- Property Tax relief
SB 15 (O’Brien) is on the table in the Senate Taxation Committee, but it could be resurrected and blasted to the full Senate for a vote. SB 15 is a bipartisan interim committee plan that offered a tax credit for lower- and middle-income residential homeowners and offered a commensurate credit for renters. It is ongoing and targeted to those who need it most.
On the House side, HB 280 (Karlen), providing means-tested relief for property taxes targeted to middle and lower income homeowners is dead.
-- Social Security Tax relief
SB 258, (Dunwell) and HB 235 (Karlen), two affordable and carefully targeted social security tax relief bills were tabled this week in House and Senate Tax Committees.
HB 526 (Fielder), a sweeping social security tax cut costing nearly $130 million a year, would most benefit taxpayers in the highest brackets. Revenue stream cuts of this magnitude threaten vital public services and harm most middle- and lower-income seniors. This fortunately died in committee.