Constitutional amendment to use sales tax revenue for education
Summary
HB 841 is a proposed constitutional amendment that would direct revenue from a new or existing sales tax or use tax, after administrative costs, to be used to reduce property taxes that fund public schools and the Montana University System. The measure also allows that revenue to be used for other purposes only if approved by a three-fourths vote of each house of the Legislature. If approved by voters, the amendment would take effect July 1, 2027, and would be placed on the November 2026 general election ballot.
In practical terms, the bill would change the Montana Constitution’s treatment of sales tax or use tax revenue by creating a dedicated funding mechanism tied to property tax relief for education. It would affect state tax policy, school funding, university funding, and the Legislature’s authority to appropriate those revenues for other uses. Because it is a constitutional amendment, it requires legislative approval before submission to the electorate and would alter the legal framework governing how such tax revenues may be spent.
Impact
HB 841 would amend Article VIII, section 16 of the Montana Constitution to require that sales tax or use tax revenue, minus administrative costs, be used to reduce property taxes supporting public schools and the Montana University System unless diverted by a three-fourths vote of each legislative chamber. This would create a constitutional earmark for education-related property tax relief and limit ordinary legislative discretion over those revenues. If adopted by voters, it would affect state tax administration, school finance, university funding, and property tax policy beginning July 1, 2027.
Sentiment
The available voting history suggests the bill had some support in the House Taxation Committee, where a motion to table the bill failed on a 21-0 vote, indicating no recorded opposition at that stage. However, the bill ultimately died in process, which suggests it did not advance through the full legislative path despite that initial committee outcome. With no committee transcript available, the overall sentiment can only be characterized as procedurally favorable in committee but unsuccessful overall.
Contention
The main point of contention is likely the proposal to create a constitutional dedication of sales tax or use tax revenue to reduce property taxes for schools and the university system, which would constrain future legislative flexibility. Another potential issue is the supermajority requirement to use the revenue for any other purpose, a high threshold that could be seen as protecting education funding but also limiting budgetary discretion. The absence of recorded committee discussion makes it difficult to identify specific arguments from supporters or opponents, but the bill’s failure to advance indicates unresolved concerns about tax policy, constitutional earmarking, or the broader sales tax framework.