From that we were able to get a good picture of what went into the 2014 Montana General Fund:
- Individual Income Tax: $1.059 billion
- Other Taxes: $290.7 million
- Property Tax: $249.2 million
- Corporate Income Tax: $145.3 million
- Oil & Natural Gas Production Tax: $103.8 million
- Vehicle Tax: $103.8 million
- Insurance Tax: $62.3 million
- Video Gambling Tax: $62.3 million
If you add the $2.077 billion of the General Fund together with the $1.241 billion of the State Special Revenue and you get $3.318 billion, which is the State of Montana’s operating budget.
Today we’ll look at what goes into each of those component pieces of the Montana General Fund, and this way we can better understand our state’s finances, and how we can make them work better for everyone.
- Wage & Salary Income: $15.2 billion
- Retirement Income: $3.3 billion
- Rents, Royalties & Partnership: $2.6 billion
- Capital Gains: $1.1 billion
- Interest & Dividends: $950 million
- Business, Farm & Other: $475 million
That’s a lot of money, $23.75 billion in fact. That’s how much money the State of Montana took from its citizens in 2013 through the Individual Income Tax.
Now, that sounds like a lot, but you have to figure the Individual Tax Rate for Montana varies from 1% to 6.9% depending on how much money you make. What’s more, capital gains are taxed by 2% less than ordinary income. I think when you look at those numbers, it’s very hard to make the case that taxes on individuals are too high. The case needs to be made that other taxes are too high, or that other taxes are needed.
- Residential, commercial, and industrial land and improvements (2.47%)
- Golf courses (1.24%)
- Mobile homes or manufactured homes (2.47%)
I have no idea what that means, but there are 16 different classes of property in Montana, so if that doesn’t give you a headache, something else surely will. What we do know is that Montana gets $249.2 million in property tax income for 2014.
For our purposes, I guess Class 4 Residential means you own a home in Montana, even if it looks a lot like that shack Bill Murray had in Caddyshack. Nonetheless, this is how the $249.2 million in Montana property taxes break down in dollars:
- Class 4 Residential: $114.6 million
- Electrical Utilities: $37.3 million
- Class 4 Commercial: $34.8 million
- Telecom & Electrical Generation: $17.4 million
- All Other: $17.4 million
- Business Personal Property: $14.9 million
- Agricultural Land: $12.4 million
The report goes on to state that
Montana law requires counties to levy a county equalization levy of 55 mills, a state equalization levy of 40 mills, and 6 mills for the university system against all taxable value in each county. A mill levy of 1.5 mills is also applied against all property in the five counties with a vocational technology (vo-tech) college.
Now, we already know that property taxes in Montana only make up 12% of the Montana General Fund…which really isn’t that much, percentage-wise. We must go continue.
- Energy Related: $56.7 million
- All Other: $48.6 million
- Financial: $29.7 million
As you can see, we’ll have to put that “All Other” onto our larger “Other Taxes” and “Other Revenue” lists to explore later. There sure are a lot of those, aren’t there? And if you’re anything like me, you know that’s where the money’s at.
One more good thing to remember about Montana’s corporate tax income is that it’s heavily dependent upon financial and energy sectors, which are not doing good right now. We’re talking “oil prices, median house price, and retail sales,” according to the report. What’s more, we rely on the West Texas Intermediate (WTI) oil price and that pretty much means revenue estimates for the next three years have to be reduced by $25 million. Bummer.
Another important thing to consider is that the price we use in Montana to determine oil prices is the West Texas Intermediate (WTI) chart. And because we need to factor transportation onto that price, it lowers it by 10%.
- Property and Casualty: 50%, or $31.1 million
- All Other: 23%, or $14.3 million
- Life: 11%, or $6.8 million
- Health: 5%, or $3.1 million
Vehicle Taxes is a hard one to find in the report, and the same goes for the Video Gaming Tax. Vehicle Taxes make up 5% of the General Fund, or $103.8 million for 2014, and the Video Gaming Tax is 3%, or $62.3 million. I guess there’s no need to break those down, they’re just a single tax.
And that leaves us with the 14% of All Other Taxes. I don’t know about you, but I think I’m ready to save that for another day.
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