BREAKING NEWS: Aug 10 – LR 123 is OFF the ballot!
Ed Jasmin, a longtime Montana businessman, banker, and Board of Regents member, recently penned this guest editorial against Legislative Referendum 123.
Mr. Jasmine is treasurer of the coalition working to defeat LR 123. MEA-MFT is a member of that coalition, and a party in the court case to have LR 123 tossed off the ballot because it is blatantly unconstitutional.
This guest editorial appeared in most of Montana’s major daily newspapers.
Refund referendum irresponsible
By ED JASMIN Guest editorial | Posted: Tuesday, July 10, 2012
For a good number of years, I was a banker here in Montana. If you were to go to any bank and asked for a $100 withdrawal, the first thing a teller would do is make sure you had funds in your account.
Verifying that there is money in an account before handing over cash or checks just makes common sense. It is a standard accounting practice whether you are a teller, a businessman, or the governor of Montana.
My understanding of how to run a good business is just one reason I oppose Legislative Referendum 123 (LR-123), which could be on the Montana ballot this November. LR-123 is an irresponsible referendum that would undermine Montana’s ability to wisely manage our state budget and would subject state government to even more unnecessary political gimmicks and tricks.
Under LR-123, if a single state employee, the legislative fiscal analyst, underestimates state revenues, it would trigger an automatic tax kickback, with most of the money going to the wealthiest Montanans. If that sounds crazy to you, you are not alone. LR 123 is so convoluted and complex, even budget experts do not agree on exactly how it would work.
You do not need to be a banker to recognize that automatically cutting kickback checks based on projections is irresponsible. Last year, for example, the state Legislative Fiscal Division was hundreds of millions of dollars off in estimating how much money Montana really had. If LR-123 were law of the land back then, the state would have ended up giving away revenues without even being able to consider necessary investments in schools, roads, infrastructure, wild land fire protection, children’s health care, and other essential state services.
Montana has weathered the recent recession better than most states because we saved money in the state budget for a rainy day. As many of our farmers and ranchers would say, we left some “grain in the bin.” LR-123 would end that practice in order to line the pockets of a special few. That is not only bad business — it is also not fair.
Just look at what happened to Oregon, the only state with a measure like LR-123. In December 2007, just as the country was heading into a recession, Oregon returned $1.1 billion to taxpayers, effectively emptying their grain bin. In 2009, after their state economy crashed and unemployment soared, the Oregon Legislature voted to raise taxes by $727 million and they are still in debt today. This kind of policy in Montana would be equally devastating.
LR-123 even prohibits any kind of override or legislative review — the kickback is automatic. If projections show the state has surplus money, checks go out the door with no questions asked, and over 60 percent of rebates would go to the top 20 percent of taxpayers.
Projecting revenues is a complicated process. To get the best results, information must be continuously updated from numerous sources. You must have the flexibility to adjust to sudden, and often dramatic, changes in economic activity, not to mention natural disasters like fighting forest fires and spring floods. The last thing our emergency services need is to become handcuffed because the state is forced to send automatic kickbacks to millionaires.
We need a budget that is controlled by the people of Montana through their elected representatives, not by one unelected legislative analyst. LR-123 proposes to shift oversight from the legislature to the state legislative analyst, empowering this person with full authority to disburse our state’s tax surplus.
District Judge Jeffrey Sherlock recently cited this fact in ruling that LR-123 is blatantly unconstitutional. The matter is now before our Supreme Court. If the Montana Supreme Court upholds Judge Sherlock’s ruling before ballots are certified, LR-123 will be taken off the ballot. If not, it will be on the ballot and you the voter will get to decide.
If this dangerous and irresponsible measure does appear on the November ballot, I ask all Montanans to do the right thing, and vote NO on LR-123.
Ed Jasmin is Treasurer of Montanans for Fiscal Accountability: No on LR 123. He is a Helena native and is a past president of the Montana Bankers Association and a former chair of the Montana Board of Regents.