Legislature passes bill cutting income tax on Social Security, but will governor sign?

(KPAX) Republicans at the Legislature have passed a bill cutting state income taxes for some senior citizens by about $17 million a year.

But it’s not clear whether the bill will become law — as lawmakers figure out the final shape of the state budget.

The measure — sponsored by Senator David Howard, R-Park City — raises the amount of Social Security income that is exempt from state income taxes.

Howard says Montana is one of only 13 states that still levies income taxes on Social Security benefits. His bill would lower taxes for about 30,000 Montana taxpayers on Social Security.

The Bullock administration opposes the bill, saying it’s too much of an impact on state revenue.

They estimate the tax cut would cost the state about $35 million over the next two years — and almost $16 million this year — because it’s retroactive.

Howard says he thinks that impact is overstated. He says he brought the bill to give seniors on fixed-income some tax relief because they’re often paying higher property taxes.

“Our property taxes have been going up tremendously. I have a friend of mine that is a pastor in Billings, Montana. And last tax period, the taxes on his home went up $800. Now when you’re on a steady income, where are you going to get that other $800? It’s pretty tough,” Howard said.

Governor Bullock has not indicated whether he would sign or veto the bill — which is on the way to his desk.