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Mont. Senate backs one-time income tax reduction

Matt Gouras, Associated Press

Department of Public Health and Human Services Director Richard Opper discuses budget issues Thursday, April 4, 2013, in Helena, Mont. Some of the most controversial issues, including Medicaid expansion and federal family planning money, are in Opper's agency.(AP Photo/Matt Gouras)

HELENA, Mont. (AP) -- The Montana Senate backed a one-time income tax cut of $47 million on Thursday as lawmakers continue to hash out competing budget priorities that threaten to chew up a projected surplus.

Senate Bill 394 was endorsed Thursday in a 26-24 initial vote. Supporters said the tax cut needs to be considered as lawmakers begin to weigh budget priorities.

Senate Majority Leader Art Wittich argued that some of the surplus needs to be sent to taxpayers.

"You have to ask yourself: whose money is it? Whose money is the $500 million sitting in our bank account right now?" Wittich said. "I would like to give a little back and return it to the people who paid it."

But Democrats argued the 5 percent across-the-board reduction provides too much benefit to the wealthy, and very little for average residents. They said they preferred other stalled measures to return tax money, such as the $400-per-homeonwer rebate sought by Gov. Steve Bullock.

"There's a lot of tax relief already floating around," said state Sen. Dick Barrett of Missoula. "We have got to get started on the process of getting this budget under some semblance of control. I suggest the place to start is voting no on this bill."

The full Senate also gave final approval, 26-24, to expand Medicaid to the working poor with federal money. Some Republicans joined Democrats in supporting that initiative, a priority of Bullock's.

Supporters argue the influx of federal money will boost the economy and help hospitals buried with uncompensated care costs for treating the uninsured. Opponents argue the state could be left holding a big bill down the road if the federal government fails to live up to the obligation.

The main budget bill was also being debated in a Senate panel, where controversial funding issues in the Department of Public Health and Human Services continued to be the focus.

A long line of supporters for Title X federal family planning money asked the Senate Finance Committee to restore the money they argue is used for health screenings, birth control and other preventative care. The money was axed by conservatives in the House opposed to Planned Parenthood.

"Title X is not about abortion. If anything it is about preventing abortion," said Stacey Anderson of Planned Parenthood of Montana. "It is about keeping women healthy. It is about keeping their partners healthy."

The panel was expected to vote on the matter Friday.