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City Commissioner Jeff Krauss (Photo by Tom Egelhoff)

City Commissioner Jeff Krauss was my guest on the morning show. We talked about the City Commission asking the Montana State Legislature to amend current state law so Bozeman can either have a local option sales tax or gas tax increase.

The money raised would be used to reduce property taxes on residents living within the city limits of Bozeman.

Tourists And Out of Town Residents

Currently tourists and those living outside the city limits of Bozeman use streets and infrastructure without any personal cost to them.

A gas or sales tax would collect at least something from these two groups when they visit Bozeman to shop, work or recreate.

This additional income could be allocated to property tax relief for local taxpayers.

The Problem With Taxes

“Nothing is so permanent as a temporary government program.”Milton Friedman. The same might be said of a tax.

The problem with a 3-4 percent sales or gas tax is that it never stays at 3-4 percent. In a few short years you’re up to eight or nine percent.

And the original purpose has long since been abandoned and the monies end up in the general fund.

And once you have a tax getting rid of it or reducing it is nearly impossible.

The lottery is a perfect example. The beauty of a lottery is that people buy tickets voluntarily. And a portion is supposed to be used for schools.

Did the state add the money they were giving to the schools to the lottery money? No. They didn’t.

Instead they subtracted it and sent that school money elsewhere. The schools might have gotten a short windfall when the lottery started but that was short lived.

Some Final Thoughts

Now here we are years later, we still have a lottery but we can’t build a new high school or renovate the old one because the public is tapped out.

They’ve seen their property taxes increase rather than decrease and they’ve finally reached the point of no return.

No more pizzas or lattes added to their tax bills. They’ve reached the breaking point.

Voters turned down the Law and Justice Center probably because they knew the high school and another elementary school would be right behind it, all paid for on the backs of the voters in the form of more taxes.

Is there another way to fund our schools? More taxes somewhere else?

Would a gas tax or sales tax really reduce property taxes? If so, how much and for how long? Would the tax be added to or subtracted from your tax bill?

I suppose the only answer is that if we really want a high school we’ll all have to buy a lot more lottery tickets.

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