Questions remain after Governor vetoes Marijuana tax revenue bill
Gov Greg Gianforte vetoed legislation that would have sent marijuana tax revenue toward local road projects.
Now, the fate of the state’s cannabis dollars is uncertain as the bill sits in bureaucratic limbo.
After passing both houses of the Montana Legislature with extensive support — 82 representatives, 48 senators, the Montana Association of Counties, environmental advocacy groups, petroleum and electric cooperative associations, and a number of other agencies and nonprofits — Gov. Greg Gianforte vetoed Senate Bill 442.
Introduced by Sen. Mike Lang, R-Malta, the proposal would have driven recreational marijuana tax revenue toward county road funding, conservation and recreation programs, addiction treatment and veterans’ services, and the state’s General Fund, reconfiguring the current recreational marijuana tax revenue model instituted in 2021.
Lang, who is now in his 11th year as a state lawmaker, called the legislation “a once-in-a-generation bill” during a Feb. 21 House Taxation Committee hearing. Senate Bill 442 garnered the support of an array of Montanans who lauded the sponsor for bringing legislation that would cut across the requests of the state’s farmers and ranchers, conservationists and public officials.
“As one of my favorite legislators used to say, ‘This is great for loggers, it’s great for ranchers, great for farmers, great for local governments, state parks, hunters and anglers, and gosh darn it, we should do it anyway,’” Mark Aagenes, director of external affairs for the Nature Conservancy in Montana, said during the February committee hearing.
Yet what was shaping up to be a beacon of bipartisan cooperation amid a contentious legislative session turned into a battle between the Legislature and the governor’s office, culminating in an expedited veto process right before the Senate adjourned sine die and leaving more questions than answers about the future of recreational marijuana tax revenue in Montana.
Currently, marijuana tax revenue is distributed under House Bill 701, legislation passed during the 2021 legislative session. HB 701 funnels the first $6 million of revenue into the governor’s Healing and Ending Addiction through Recovery and Treatment (HEART) program; 32% of funding to recreation and wildlife projects managed my Montana Fish, Wildlife and Parks (FWP); up to $200,000 to veterans and surviving spouses; and $150,000 to crisis intervention training, with the remainder going into the General Fund.
The reconfigured formula laid out under Senate Bill 442 would have allocated 11% of recreational marijuana tax revenue for the HEART program; 5% for veterans and surviving spouses; 20% for the Habitat Legacy Account, a new account that would bolster wildlife habitat improvement projects; 20% for county road projects; and smaller allocations for state parks and other recreation funding, with the remainder going into the general fund.
Local and state officials applauded the addition of county road maintenance into the funding formula, citing much-needed infrastructure improvements that would address road safety concerns and ensure access to public lands.
“I supported that bill because we’ve got a tremendous amount of rural gravel roads that are used for both recreationalists and emergency responders,” Flathead County Commissioner Randy Brodehl said.
Brodehl, who served in the Montana House of Representatives for eight years, said that while he understands the complicated give-and-take that defines the legislative process, the support of 132 lawmakers “should have been a clear message to the governor” to sign Senate Bill 442.
According to the governor’s office, however, the bill improperly used state funding for local projects, and the FWP programs addressed by the Habitat Legacy Account were already fully funded, making the reconfigured allocations an inappropriate use of taxpayer dollars.
“We have an aggressive conservation agenda and we’re going to use Habitat Montana to fund, in part, those projects. I’m assured by FWP we have record funding in that fund already to satisfy the projects that are coming forward. That’s why, in our budget, we have taken the funds from marijuana and directed them towards law enforcement, addiction recovery, and other things to help people get healthy. But I am confident that the money exists at FWP to do the conservation projects that we have in front of us,” Gianforte said during a Feb. 23 press conference.
In his May 2 veto letter, the governor wrote: “Senate Bill 442 creates a slippery slope, an incentive for local jurisdictions to reduce their services while keeping taxes higher on their citizens. Local jurisdictions will not have to dedicate as much of their local resources to their local roads as they have had to. But instead of cutting citizens taxes proportionately, they can reallocate those dollars to capricious, unnecessary projects, resulting in a net increase of Montanans tax burden.”
The letter also said that the bill would create “the illusion that the state will accept increasing responsibility for matters that are strictly under the jurisdiction of local authorities.”
Both state and local officials characterized the governor’s veto as a blatant disregard of the will of the Legislature and, in some cases, a tactic to keep a higher percentage of marijuana tax revenue under his discretion in the General Fund.
“Some of those may be really good projects,” Brodehl said, discussing the programs funded by the governor through the General Fund. “But the will of the Legislature was very clear, just looking at the vote itself, that 20% of the marijuana tax should go to road maintenance.”
Sen. John Fuller, R-Kalispell, who voted for the bill in the Senate Finance and Claims committee, as well as on the Senate floor, said that while he understood the governor’s concerns about using state funding for local projects, the bill would have addressed dire road maintenance needs across the state.
Lang said that over discussions during the session, the governor’s office told him repeatedly that the bill would be vetoed unless the county roads allocation was removed. However, Lang said, “I didn’t want to change the bill.”
The fight to pass Senate Bill 442 culminated in the adjournment of the Senate less than two hours after the governor vetoed the legislation, leaving lobbyists and lawmakers with questions as the bill now sits in uncharted legislative territory.
Legislators are able to override vetoes from the governor under two sets of circumstances — by a vote during the session or by a poll of the legislators issued by the Secretary of State after the session has adjourned. If a bill is vetoed and lawmakers do not vote on it, it dies.
However, the Senate voted to adjourn about an hour after Gianforte had vetoed Senate Bill 442, meaning that the body did not act on a bill that was vetoed during the session, effectively killing it.
Senate Majority Leader Steve Fitzpatrick, R-Great Falls, said that the rushed sine die motion was brought “exclusively” in efforts to end the session before the governor could veto Senate Bill 442, allowing for lawmakers to override the veto after the session through a poll. Instead, however, as Fitzpatrick told reporters after the Senate adjourned, the legislators attempting to pass the bill “screwed themselves so bad.”
“If they would have just chilled out, the veto would have been returned,” Fitzpatrick told the Beacon. “It has to be the stupidest thing I think I’ve ever seen in the legislative process.”
The Senate Majority Leader said that the vote to sine die in an attempt to pass Senate Bill 442 came out of a “complete panic” from supporters of the bill.
The tight time stamps in the bill’s final hours have left questions about whether or not the legislation is officially dead.
In a letter to the Secretary of State requesting a poll to override the veto, Lang argued that the veto process improperly invalidated legislators’ opportunity to overturn the decision.
“We understand the Governor vetoed Senate Bill 442, and that the bill and veto message was not read across the rostrum in the Senate,” Lang’s letter read. “The Senate adjourned Sine Die prior to the Governor returning the bill to the originating house as required in MCA 5-4-306. As such, we anticipate you will be sending the legislature a copy of the bill, the veto message, and polling instructions within five (5) working days of the alleged veto as required under MCA 5-4-306 (2).”
The Secretary of State’s office as of Thursday afternoon had not received the official veto from the Governor’s office. Until the Secretary of State is in receipt of the bill, a veto override poll cannot be conducted.
Though questions remain about next steps, Fitzpatrick maintained that the bill is dead. The Senate majority leader called the decision to sine die in efforts to save the bill “obnoxious” and ignorant of the work that the body had yet to complete.
“Over 130 legislators voted in favor of SB 442, and they deserve the chance to have a final say on legislation that directly impacts the lives and livelihoods of their constituents,” a May 11 letter written by the Montana Association of Counties read. “Anything less is a failure of government.”