Fiscal Conservatism

Defining the Terms

The starting place for understanding fiscal conservatism is a quick definition of terms. “Fiscal” simply means “the government’s purse”. In the United States, where the government is to be by and for the people, it means “the people’s purse”. Conservatism is a close cousin to conservation, which denotes care, stewardship, and protection. Conservatism refers to a mindset that honors caution, prudence, efficiency, and careful consideration of policy or resource allocation to undergird such constitutional principles as free enterprise, private ownership, law and order, equal opportunity, common defense, and others.

Together, “fiscal” and “conservatism” mean that law makers make sober choices about how the people’s representatives allocate the people’s money. Fiscal conservatism seeks to assure limited and efficient public spending, low taxes, low or no government debt, limited regulations, and prioritizing privatization of goods and services, so that the free market is liberated to create jobs (which raises tax revenue in parallel) and provide opportunity for personal financial stability in all socio-economic sectors.

The Current Financial State of our State—Good, Bad and Ugly

In Montana, we are fortunate that Article VIII, Part IX of the Montana constitution requires a balanced budget, so our legislature has an obligation to steward the people’s purse efficiently. This is not unlike we business owners and families, who are likewise obligated to manage our money effectively, if we are to live within our means, avoid oppressive debt, have enough margin to contribute to charity, and enjoy opportunities to prosper.

We Montanans can be grateful that Montana Governor Gianforte signed into law HB 251, which assured a retirement of all the state’s general obligation debt. Governor Gianforte said in late 2022, “In this budget, we are cutting… income and property taxes by $1 billion…” Well, he’s right about the first part; this will truly have a positive impact on the majority of income taxpayers beginning in 2024, when income tax rates will simplify and go down precipitously for almost all income levels. The capital gains rates will be more complex, but on balance, it appears they will be fairer.

But what happened to the governor’s promise of cutting property taxes? Almost no District 70 homeowner or landowner with whom I’ve spoken, from either side of the political aisle, is happy about the marked increase in property taxes for the 2023-2024 cycle. All we really know is that the unelected administrators at the Montana Department of Revenue determined the state needed to impose an excessive upward “market adjustment” on property taxes across the state based on increased property values. Why? If we have, in fact, more property owners by virtue of increased population and newly constructed homes across the state, would that not itself bring in more property tax revenue, without raising rates?

A brief review of tax increases throughout our district shows that it was not uncommon for property taxes to increase well over 50%! This led one District 70 constituent to rhetorically asked her county treasurer, “When the housing market crashes again, do you think our Department of Revenue will make a downward “market adjustment” and lower our property taxes?” Another constituent remarked that higher tax rates, coupled with significantly higher home prices are making it nearly impossible for several businesses and state agencies (no less) to hire workers. If people can’t afford to live in Montana to work, they will find other states in which to work and live. So, while Tom Welsh, our District 70 representative was spin-doctoring a $675 property tax rebate per property owner in 2023, it provided very little relief for homeowners, investment property owners, and agricultural producers who saw their taxes increase by thousands of dollars. This bait and switch is not what fiscal conservatism is all about. It is hard enough for low and middle income earners to afford the shockingly high home values in several pockets of our state. When they can’t even afford to rent because of the double jeopardy of more expensive housing and higher taxes that landlords must pass on to renters, this is bad, bad news for much-needed trades and services, such as auto service providers, utility contractors, restaurants, retailers, and health care providers, to name a few.

Government agencies need capital to function and pay government employees reasonable wages; a fiscally conservative approach to this problem will be to assess whether certain governmental agencies and programs are necessary for the public good. We cannot say how this will play out, but Montanans have spoken about these egregious property tax increases and it will be up to the next term of legislators and the governor to find a suitable solution for meeting the states obligations, while also reducing property taxes. Part of the answer likely lies in unhitching public schools from federal government monies and the expensive rules and regulations that accompany them, while the state also decouples from the

K-12 public school model, and develops a school and education choice policy aimed at allowing market principles to prevail.

A Montana House District 70 Approach to Fiscal Conservatism

As a lifelong conservative with a minor in agricultural economics, I believe we must manage the state’s people’s purse as if it sits in own households. Our job as legislators is to work with the governor to make sound decisions regarding appropriation of funds, and I will endeavor to work with my fellow house colleagues to do just that. My goal is to carefully assess funding in light of our state’s constitution, and vote against monies designated toward programs that are not constitutionally mandated. If we are appropriating the people’s money toward a constitutionally mandated program, I will strive to ensure that the stewards of those dollars are making economically sound decisions on how they use them.