Gov. Gianforte Proposes 4.7% Flat Income Tax and 2029 Biennium Budget

Governor Greg Gianforte proposed a 4.7 percent flat income tax rate for Montana during his budget unveiling on Thursday.

The proposal, titled “Realizing the Montana Comeback,” serves as the centerpiece for the governor’s budget for the 2029 biennium. According to the official budget document, the plan uses the state's current fiscal strength to provide permanent tax relief while maintaining funding for public services.

The budget seeks to deliver $220 million in permanent income tax relief to Montanans. This figure is driven by two primary mechanisms: the move to a 4.7 percent flat rate and an increase in the earned income tax credit from 20 percent to 30 percent of the federal credit. These measures are intended to specifically benefit lower- and middle-income residents.

“When I took office, I made Montanans a promise to create more good-paying jobs and protect the Montana way of life so our kids and grandkids don’t have to leave the state we love,” Gov. Gianforte said.

Governor Gianforte Unveils Budget for 2027 Legislative Session: Realizing the Montana Comeback — Governor Greg Gianforte

The governor also highlighted the state’s current economic trajectory, noting that Montana has seen 16 percent growth since 2021. He claimed this rate is the fifth-fastest in the nation.

To buffer the state against economic volatility or unexpected costs, the budget includes a $300 million one-time investment into the Budget Stabilization Fund. This infusion would bring the fund to nearly $900 million, which the governor’s office described as a record amount. The proposal also seeks to double the Fire Suppression Fund to increase resources for wildfire season.

Gov. Greg Gianforte Lays Out 2027 Budget Proposal For Montana — Forbes Breaking News

Infrastructure accounts for a large portion of the spending plan. The governor is requesting one-time funding to maintain state roads without resorting to a gas tax increase. These requests include:

$100 million for county roads and bridges.
$125 million for the State Highway Trust.

While the budget emphasizes tax cuts and savings, critics often point to the reliance on one-time-only funding to address major infrastructure and public safety needs. Relying on non-recurring revenue can create budgetary gaps in future legislative sessions if the state’s revenue growth slows.

The budget allocates several one-time investments toward social services and public safety. This includes $25 million for the Behavioral Health Systems for the Future Generations Fund and $5 million to expand shelter capacity for victims of human trafficking. Emergency services would also receive $10 million to upgrade local 911 call centers and improve response times.

Education funding is structured to protect current levels while expanding specific scholarship programs. The budget proposes increasing Big Sky Scholarships to a total of $24 million through statutory increases. Other educational allocations include:

Education Initiative	Funding Type	Amount
School Facilities Trust	One-time	$13 million
Cell phone-free school policies	One-time	$1 million
Big Sky Scholarships	Statutory increase	$24 million

Small businesses and agricultural operations are also targeted for relief. The budget proposes expanding the business equipment tax exemption from $1 million to $3 million. According to the governor’s office, this change would eliminate the tax burden for more than 500 small businesses, farms, and ranches.

“Because we’ve been good stewards of taxpayer dollars, cut taxes, cut red tape, promoted individual freedom, and supported law enforcement, Montana is stronger than ever before,” Gov. Gianforte said.

State employees are included in the proposal via a $30 million one-time investment for the State Health Plan and $14 million in one-time bonuses. These figures follow previous investments in state buildings, including an $800 million commitment to maintenance and prison capacity expansion.

The formal release of the full “Realizing the Montana Comeback” budget is scheduled for Monday, November 16.

Worth a look