Montana Taxpayer Dividend Measure (2012)

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The Montana Taxpayer Dividend Measure, also known as LR-123, did not make the November 6, 2012 ballot in the state of Montana as a legislatively-referred state statute. The measure would allow residents to receive refunds of surplus state tax collections if those collections exceeded a certain trigger. The measure was introduced by State Senator Joe Balyeat, who introduced the measure during the 2011 state legislative session. The formal title of the measure is Senate Bill 426.[1]


List of ballot measure lawsuits in 2012

Montana AFL-CIO v. Montana Attorney General

On October 5, 2011, four labor groups asked District Judge Kathy Seeley to remove the measure from the ballot. The groups stated that the bill is unconstitutional because it is an inappropriate appropriation of money by legislative referendum. The groups that filed 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 last group is not a labor union.[2]

During the week of November 4, 2011, the Montana Attorney General's office asked Seeley to dismiss the lawsuit, stating that the matter should be discussed after voters have their say on the matter. According to Assistant Attorney General Andrew Huff: "LR-123 is not clearly unconstitutional on its face and should proceed to a vote, consistent with judicial deference to the people’s authority in the referendum context."[3]

On Thursday, February 16, public employee unions asked District Judge Jeffrey Sherlock to bar the proposal from the ballot, arguing that the measure unconstitutionally grants powers of appropriation every time the proposed conditions are met. John Morrison, a former state auditor, said the measure allows for a large degree of human error. The state attorney general's office is requesting that the case be dismissed. Andy Huff, Assistant Attorney General, said, "It is rare that these initiatives and referendums are struck down. It is only when there is procedural problem or gross constitutional problems with the bill." Morrison asked that Judge Sherlock ruled fairly quickly so that the losing side had time to appeal before the election in November.[4]

On Wednesday, March 14, 2012, Judge Sherlock ruled that the ballot measure does not represent an illegal appropriation of money by ballot issue. However, the challenge to the measure is not over yet, Judge Sherlock still has to rule on whether or not the measure constitutes an illegal delegation of power.[5]

On Tuesday, June 7, 2012, Judge Sherlock ruled the measure unconstitutional and disqualified it from appearing on the ballot. Sherlock ruled that the measure is an unconstitutional delegation of power by the Legislature to an employee, saying, "Everyone, including the undersigned, would like to see a tax credit or refund. The Legislature could do so itself or could properly delegate this function to an executive agency. However the Legislature cannot delegate its power to one of its employees."[6]

On Friday, June 22, the state appealed the case to the Montana Supreme Court. Attorney General Steve Bullock, representing the state in the case, argued that voters should be allowed to vote on the ballot measure before a court decides on whether it is legal or not.[7]

Path to the ballot

The Montana House of Representatives gave preliminary approval to the measure on April 12, 2011, with a vote of 67-33. It faced a final vote from the chamber before going back to the Montana State Senate for a final vote.[8]

See also