Governor Greg Gianforte Proposes Flat Income Tax for Montana

Governor Greg Gianforte previewed his final state budget proposal on November 12, 2026, at the Montana State Capitol, centering the plan on a "Montana Comeback" agenda. The proposal seeks to replace the current tiered income tax system with a flat rate of 4.7%, eliminating the 5.4% rate previously applied to higher income thresholds. To mitigate the impact on lower-income residents, Gianforte proposed raising the state earned income tax credit from 20% to 30% of the federal credit.

The budget prioritizes one-time spending over permanent government growth. Key allocations include $300 million to bring the state rainy-day fund to approximately $900 million, $225 million for infrastructure repairs to roads and bridges, and $30 million for the state employee health plan.

Legislative reaction is divided. Senate President Matt Regier expressed general support for tax relief, though he questioned the specific distribution of those benefits. Conversely, Democratic leaders, including House Minority Leader SJ Howell, condemned the flat tax as unfair and argued that the policy primarily benefits wealthy residents. The full budget proposal is scheduled for release on November 17.