Senator Greg Hertz talks election security, statewide sales tax, run-off elections
The "very conservative" six-session lawmaker also weighs in on the Freedom Caucus.
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A CPA by trade, Senator Greg Hertz (R-Polson) has served six sessions in the state Legislature, and currently chairs the Senate Taxation Committee.
Read on as Senator Hertz brings the detail-oriented approach of a “tax guy” to bear on a wide range of topics: Montana’s “very secure” elections, the benefits of a statewide sales tax, his take on the Montana Freedom Caucus, his proposed constitutional amendment to allow run-off elections and more.
Max: Senator Hertz, you introduced a potential constitutional amendment to allow run-off elections for statewide elections in Montana. What’s its status?
Senator Greg Hertz: That bill is twofold. First we would need to amend the Constitution of Montana because it basically says that individuals receiving the majority of the vote win an election. So it has to [be changed to language like] “individuals receiving more than 50% of the vote” and to say that the Legislature has the authority by law to prescribe runoff elections if they desire to.
At the same time, I'm working on rules for doing a runoff election. You would think it’s pretty easy, but there's a lot of different issues that you need to address: How fast can you get ballots printed? A lot of people in Montana use absentee ballots. You have to deal with people in military service who are overseas: how do they vote in the runoff election if they voted in the general election? And you have campaign issues to deal with: expenditures, contributions. So you gotta dig down into the campaign finance laws.
Why were you interested in introducing this legislation?
I've always believed that you should get more than 50% of the vote [to win]. You look at Governor Bullock's elections, you look at Senator Tester’s, they have won with less than 50% of the vote. [Note: Both politicians have additionally won statewide elections with more than 50% of the vote.]
I think it's just something that we need to look at and see if it’s a concern to the citizens. And of course the citizens would have to [vote to amend the Constitution].
You chair the Senate Taxation Committee, which recently debated SB 15. The bill allocates a property tax credit to homeowners and renters. I gather that you’re not crazy about it. What do you think is the best strategy for reducing Montanans’ property taxes?
Senate Bill 15 is a rebate program. We're gonna be doing some of that with the surplus. There's income tax rebates working through the House that will provide $1,250 to single taxpayers and $2,500 to a married couple [via HB 192].
There's another bill [HB 222] that would be two $500 rebates. So we're using the surplus for those rebate programs. My tax philosophy is “let's work on things that fix the issue long term that are fair to all taxpayers.”
In Montana we only have a two-legged stool: income tax and property tax. If you really want to reduce property taxes in Montana, we need to discuss a statewide general sales tax.
And we could use that as a replacement for our property taxes. And some of the numbers that I have run—I like a state-wide sales tax that covers retail services and professional services, of 2.5 to 3%—would generate close to $1.5 billion [annually].
My thought is, Okay, let's use 75% of that to reduce Montana residents’ property taxes. Using those numbers, I could reduce the average Montana taxpayer’s property taxes by about $1,700 to $1,800 a year.
The other idea being floated is, let's have a local-option tax [similar to Whitefish’s existing 3% resort tax].
I've told people, don't sell this as property tax relief because it's not significant. Even if Whitefish used all of their local-option tax for property tax relief—with the numbers that I crunch—it would amount to about $200 per year for each residential property tax owner.
Quite frankly, unless you're in a tourist area, it's not a tourist tax. It's going to be paid more by Montanans. So I’m just trying to get people to be honest about that.
What’s your take on the new Montana Freedom Caucus? I gather it has some closeted members, so I don’t want to assume you’re not a part of it.
I'm not a member of the caucus. Nobody approached me to join the caucus. I don't know if I would've or not. I'm not sure what their goals are.
I don't have a problem with the Freedom Caucus. I consider myself a very conservative member of the Legislature, as do many of my fellow legislators.
From a policy standpoint, I believe we're all [generally] on the same page moving forward. We have this little $2.5 billion surplus, and everybody's got their ideas on how to spend it. I think that [causes] more of the division within our caucus than any policy issues.
At the national level, I think the Freedom Caucus does a great job of bringing things to the forefront.
What are some examples of issues you think the national caucus is highlighting?
In regards to Speaker McCarthy's election, I think that was good for the country. People got to actually see exactly how a legislative body works and understand why rules are so important. What’s going on in the US Congress is shameful.
I've talked to Matt Rosendale, he's a good friend, and what Matt and some of his other colleagues were trying to do is to get Washington to work more like state legislative bodies, where we have single topic bills. In the US Congress you can put a lot of things in bills that don't even belong in there. And there are earmarks going and they’re rarely debating bills on the floor like we do.
It’s their back-and-forth, too. [They’re in DC] for three days and fly home every week and spend most of their time raising money.
I've always said, you guys just need to stay there for three months, hash things out, pass bills, come home for two months, talk to your constituents, go back. I think that's the way this whole process was envisioned.
The proof will be in the pudding, so we'll have to see how things work going forward.
You look at some of the expenditures coming out of DC and I'm not sure they're the best use of taxpayer money. It’s better to have a thorough debate of where the money goes and how we can get the best bang for our tax dollars and for the public. We don't all agree in the end, but that's the way the system's designed to work.
Election integrity has become a hot-button issue in Montana, and at the national level. What’s your take on it?
Election integrity is our constitutional duty. I feel it's important that this special select committee is [given] the ability to vet any issues that we might have.
But from what I've seen in Montana, our elections are very secure. And in my personal opinion, I'm very comfortable with where we're at in Montana. You know, I visited with my election clerk in Lake County and in some other counties, and I think they do a very good job. I know a lot of voters are voting absentee now. They do a very good job verifying signatures. I think security is good.
I was just listening to a recording from [a bill hearing] the other day about [security for] vote tabulating machines. I do that when I'm driving back and forth to Polson.
Dana Corson from the Secretary of State's office does a great job in overseeing our elections. A lot of people don't understand that those machines are not connected to the internet. As a CPA, I'm like, Hey, you wanna figure something out? Do some auditing on it.
A lot of citizens probably aren't aware that after an election, they randomly select certain counties and cities and go in and have an audit team count the ballots and compare them to the count that came out of the machines. They're not finding any issues.
Over the years, the elections that [have resulted in] recounts, those generally result in very few ballots moving one way or the other.
We're doing a pretty good job here, but can we do a better job? Yes. We can always improve on what we do.
Are there other priorities for you this session—not necessarily bills you're sponsoring?
Obviously, income tax reform, which I'm working on for both individuals and business owners in Montana.
Property tax reform is at the top of my list too. What I want to protect with property taxes are things like schools and safety and water and sewer. Those are the essential services that Montanans expect from their government.
Now, there's a lot of other services that I would call fluff that people might want in their community. Whether it’s an ice skating rink, improvements to the fairgrounds, open space bonds, park and recreation, we're looking at bills that might [require] a higher level of voter approval to pass those, because we get mill levy fatigue in a lot of our communities. In Missoula, they finally voted down several levies, including one to do with the homeless and a couple at the fairgrounds. I think voters just said, hey, we've had enough.
[Regarding inflation], we have to make sure that we're taking care of inflation concerns with the budget. My biggest concern as a tax guy is the revenue. What is our continuing revenue stream gonna look like? We’re at this fast growth right now, but when's it gonna level off? Is it possibly going to drop? If it does, by how much? We don't know any of that. We won't really know any of that probably until we're out the door, next summer. So we need to put all these safeguards in the budget to protect us.
We set the revenue estimate, and that's how much money we can spend. We gotta get that right. We don't want to overspend and get in trouble as we move forward.
Before we wrap up, who’s someone across the political aisle that you admire, or enjoy spending time with?
I hate to name individuals (laughs). I have so many friends across the aisle that I talk to on a regular basis and might go out and have a beer or eat with. We're not like what's going on in DC.
The vast majority of our bills [are] bipartisan bills. There’s just ten or fifteen percent of stuff that we don't always agree on. And a lot of times that's tax policy. There might be other privacy, personal-type issues, but for the most part, we get along great up here.
This conversation has been edited and condensed for length and clarity.
Well, that’s all for today, folks. Thanks for being here. We’ll be back in two weeks.
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Good article Max