Gov. Greg Gianforte joined the Mountain States Policy Center (MSPC) this week to outline his tax cut priorities ahead of the 2027 legislative session, emphasizing a renewed push to move Montana to a flat income tax.
Speaking at an event in Helena alongside MSPC Founder and President Chris Cargill, the governor highlighted what he described as historic tax relief enacted during his administration and argued that additional reforms are needed to keep Montana competitive with neighboring states.
“Since taking office, my top priority has been to open the door of greater opportunity to more hardworking Montanans,” Gianforte said. “With that in mind, we’ve delivered historic tax cuts, paid off the state debt, achieved a record stretch of low unemployment, and secured historic funding for our schools. But there’s more to do, especially when it comes to lowering income taxes, and I’m focused on getting it done.”
Push Toward a Flat Tax
Gianforte noted that while lawmakers approved significant income tax reductions in 2021 and 2023, Montana continues to have one of the highest top marginal income tax rates in the region.
“The reality is, even after our historic tax cuts, we still have the highest income tax rate in the region,” he said. “Across the country, states are cutting their income tax rates. To stay competitive, we must do the same.”
Under legislation passed last year, the top income tax rate is scheduled to drop to 5.65% in 2026 and then to 5.4% in 2027. The measure also expanded eligibility for the lower 4.7% bracket and doubled the state’s earned income tax credit.
The governor said those changes moved Montana closer to a flat tax structure but stopped short of fully adopting one rate. He indicated he plans to work with lawmakers in the next session to continue lowering and simplifying the income tax.
Budget Discipline as a Foundation
Gianforte tied the state’s ability to reduce taxes to what he characterized as restrained state spending.
“Our income tax reductions have only been possible because we have enacted a conservative budget, keeping overall state spending below the rate of inflation,” he said. “This last legislative session we did it again, with state spending only increasing by 0.7%.”
Supporters argue that maintaining budget growth below inflation creates room for further rate reductions without jeopardizing core services.
Before the governor’s remarks, MSPC Vice President and Director of Research Jason Mercier outlined the economic case for a flat tax, pointing to Montana’s strong performance in several national economic rankings.
“Nationally, Montana ranks in the top five states in most of the economic indicators that we have looked at,” Mercier said. “There’s been fantastic work bringing down the income tax rates, regulatory reform, permitting reform — the Treasure State has put itself on the map as a place that people want to come to.”
However, Mercier said Montana’s graduated income tax structure still places it at a competitive disadvantage compared to neighboring states with lower or flatter tax systems.
“Coming down to a flat rate not only simplifies your code but also gets you to the next step with revenue triggers to continue lowering the rate,” he added.
Looking Ahead to 2027
The 2027 legislative session is expected to feature continued debate over tax policy, spending priorities, and long-term revenue sustainability. While the governor and supporters frame a flat tax as a competitiveness and simplification measure, critics have previously raised concerns about distributional impacts and long-term fiscal stability.
MSPC, which hosted the event, is a multi-state think tank focused on advancing free-market and limited government policies throughout the Mountain West and nationally.
As the session approaches, the governor signaled that income tax reform will remain at the center of his agenda.
By DNU Staff