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Economic issues take center stage in Gianforte's State of the State address

A screenshot from a video of Gov. Greg Gianforte delivering the 2023 State of the State address on Jan. 25, 2023.
Gov. Greg Gianforte delivers the State of the State address to a joint session of the Legislature on Jan. 25, 2023.

Corin Cates-Carney: Governor Greg Gianforte delivered his second State of the State Address Wednesday night in front of a joint session of the Montana Legislature. I'm joined now by Montana Public Radio's Shaylee Ragar and Ellis Juhlin to break down the governor's remarks and the Democrats' response.

Shaylee, let's start with you. Set the scene for us. What was the tone like in the House chamber?

Shaylee Ragar: The Montana House of Representatives was full of legislators and the state's top officials for the address. And compared to the last State of the State, the tone was fairly positive. When Gianforte gave his address in 2021 he was very newly elected. It was amid the pandemic and pre-vaccine, and the state was facing a lot of challenges, both due to the health emergency and to the economic disruptions it caused. So now, two years later, Gianforte has a lot more experience in the state's executive office. He has a supermajority of Republicans in the statehouse. We have a $2 billion surplus, which is largely attributed to the windfall of federal dollars Congress doled out in pandemic relief, and a higher than expected income tax haul. So in January of 2023, the governor is in a pretty advantageous position.

Gianforte: The state of our state is strong and it is much stronger than it was two years ago.

So the state's in a much different place than it was two years ago. What did you hear as the main points in the governor's latest state of the state?

Ragar: Governor Gianforte, for the most part, stuck to the bread and butter economic priorities he's been talking about since he was on the campaign trail. He also talked about the red tape relief task force, which he says will encourage economic growth by cutting burdensome regulations. And there are 160 red tape relief bills this session. He also talked about education, housing, behavioral health, restricting abortion and forest management. But his big focus is the economy.

How do the things he's working on and calling wins for his administration at this point square with those campaign promises?

Ragar: He's staying pretty consistent. He has proposals to cut income taxes, business equipment taxes and capital gains taxes again in 2023. He says those policies were previously successful, citing job growth in the state.

Gianforte: There's no doubt about it. Montana is open for business.

Ragar: A new goal for the governor is to pay off the state's general obligation debt in 2023, and rebates for property taxes. And I think we're seeing him respond to some criticism from last session that his tax cuts disproportionately benefit the wealthy. He's proposed more than doubling the state's Earned Income Tax Credit for low to middle-income earners. And when he talked about that during his address, that's the loudest I heard Democrats cheer all night. Republicans were on their feet for a lot of the speech. But it's unclear what all will make it to the finish line.

Could factions we've been hearing about within the GOP keep some of the governor's priorities from making it to his desk?

Ragar: They have already started sparring over a proposal to give property tax rebates to Montanans. The governor's proposal to give households up to $2,000 in rebates was tabled in committee. Then the committee revived it, but they cut the rebates in half. Gianforte made a point to call out the lawmakers who tabled that bill during a press conference, and he didn't directly address this division in his address. But Gianforte did say he wants collaboration this session.

Gianforte: We're best when we're working together. Let's keep that in mind as we work through this legislative session.

Ellis, you were watching the Democrats' response. What did they say?

Ellis Juhlin: Senator Shannon O'Brien, the Senate minority whip, gave the Democrats' response and continued criticism that many of Gianforte policies, particularly regarding taxes, benefit wealthy Montanans the most and fall short of addressing some of the state's biggest issues.

O'Brien: Quite honestly, he used the tired old Republican playbook of giving our wealthiest a very, very generous tax break.

Juhlin: Democrats see housing and child care as some of those biggest issues that are facing Montanans.

O'Brien: Instead, he offers a red tape initiative. Which quite frankly does nothing for Montana families and nothing to address the housing shortage.

Juhlin: Democrats have proposed taking $500 million of the surplus to create an affordable housing fund, and they've outlined more funding for child care options. But like anything the Democratic Party proposes, it's going to need bipartisan support to get passed.

So what's next as we move further into the session?

Juhlin: The big picture is that the state has a lot of money to work with, and there's going to be a lot of debate on how to spend it. The governor has outlined his goals. Legislative Republicans have some of their own and Democrats have outlined the things that they want to see. So in the weeks ahead, we're going to be tracking the wins and losses.

Ellis, Shaylee, thanks for the recap.

Juhlin: Thanks, Corin.

Ragar: No problem.