Oct. 6 – MEA-MFT has joined other groups in filing a lawsuit against a dangerous ballot measure.
Legislative Referendum 123 (LR 123) threatens funding for crucial public services that make it possible for Montana families and businesses to thrive.
If passed, LR 123 would allow every future Montana legislature to take funding for public services and give it away in tax refunds – refunds that will go to the highest income and property taxpayers in the state.
“The Tea Party Republican dominated 2011 Legislature proved it could stash plenty of tax revenue away — revenue that could have and should have been invested in private sector job creation, k-12 public schools, Montana university system, and dedicated state employees who everyday do work that matters,” said MEA-MFT President Eric Feaver.
“It is revenue that could have saved local property taxpayers, college and university students millions of dollars.”
If LR 123 survives the court challenge and voters pass it, Feaver said, “every legislature hereafter could arbitrarily and capriciously dedicate itself to perpetual disinvestment in private sector job creation and public services. LR 123 is all wrong, and as designed, unconstitutional.”
News story follows:
Lawsuit seeks to stop tax-refund ballot measure
By CHARLES S. JOHNSON IR State Bureau | Thursday, October 6, 2011
Four labor unions and another group asked a state district judge on Wednesday to strike from the 2012 ballot a legislative referendum that, if passed, would return state tax revenue to taxpayers if a certain budget trigger is met.
Filing the lawsuit were MEA-MFT, the Montana AFL-CIO, Montana Public Employees Association, Montana Association of Area Agencies on Aging and the American Federation of State, County and Municipal Employees, Montana Council 9. The case is before District Judge Kathy Seeley of Helena.
The suit challenges Senate Bill 426, by Sen. Joe Balyeat, R-Bozeman, that the 2011
Legislature put directly on the 2012 ballot as a legislative referendum. The measure goes straight to the ballot for a public vote and cannot be vetoed by the governor.
The bill is now known as Legislative Referendum 123.
If passed, the referendum would require the state Revenue Department to refund to taxpayers one-half of whatever amount exceeds 125 percent of the state’s budgeted general fund, for a two-year period.
The excess balance would have to be at least $5 million before refunds are handed out, via state income-tax credits.
Former state Auditor John Morrison, a Helena attorney, is the lawyer for the groups suing to toss LR-123 from the ballot.
He argued that LR-123 is an unconstitutional appropriation of money by referendum. He also said it unconstitutionally delegates legislative authority to the legislative fiscal analyst and the departments of Administration and Revenue.
“If LR-123 appears on the ballot and is passed by voters, untold and indeterminable millions of dollars will be drained from the state treasury, indefinitely and without legislative approval, causing significant economic injury to the plaintiffs and their members,” the lawsuit said.
Unlike other initiatives or referendums that define how funds may be appropriated by the Legislature, LR-123 requires these appropriations to be made forever without any further legislative acts, the suit said.
The referendum empowers the legislative fiscal analyst, among others, to make the calculations that would lead to the tax credits to Montanans. The lawsuit said the fiscal analyst cannot be delegated these duties by the Legislature.
“We believe LR-123 is unconstitutional on its face,” said Eric Feaver, MEA-MFT president. “Voters should not be encumbered with consideration of acts that cannot stand a constitutional test. We think the courts will agree.”
Balyeat, meanwhile, said he’s confident the referendum will withstand the legal challenge.
“It’s all about the money,” he said. “The government union bosses aren’t satisfied with keeping more than half of unanticipated tax revenue. They want to keep 100 percent of it to expand government.”
Funds in excess of budgeted amounts cannot be spent without approval by a subsequent Legislature.
Balyeat said the constitutional ban on putting an appropriation on the ballot is very specific.
“An appropriation is specifically defined in statute,” he said.“According to our legislative legal staff, SB426, if approved by voters, it does not constitute an appropriation. It’s a credit reduction of revenue.”
The Revenue Department “constantly issues tax-refund checks and tax credits,” Balyeat said. “These have never been found to be unconstitutional appropriations because the money hasn’t gone to the state treasury yet.
The MEA-MFT and others have had considerable success attacking ballot issues in court.
In 2006, they successfully invalidated three initiatives, in which Balyeat was involved. One of them would have limited the rate of future growth of state government spending to an index based on population growth and inflation.
The MEA-MFT also spearheaded a legal challenge to Constitutional Initiative 75, which would have required a vote of the people on any tax or fee increase. The Montana Supreme Court in 1999 struck down the measure after voters had adopted it. Balyeat was involved with that measure as well, along with Rob Natelson, a former law professor from Missoula.