April 23, 2024
Property

An easy fix to Montana’s property taxes



The median property tax increase for Montana homeowners went up 21% this year. 

According a recent study by the Montana Free Press, that means 50% of all Montana had between $98 and $660 increase on the property taxes for their home.   For 25% of homeowners it will be more than $660. In Bozeman’s Gallatin County, most residential owners will pay between $579 and $1,266 per year more. In Missoula, one half of the homeowners will pay $532 or more.  

Much of the increase will go to decrease the property tax of Montana’s largest corporations. According to MTFP, North Western Energy’s taxes will be $36 million less, Rail Link $2.5 million less, Charter Communications $1.8 million less. 

Gov. Greg Gianforte’s first solution was to claim the $675 rebate the last legislature authorized should cover it. That, of course, was to reimburse taxpayers for previous years, not future taxes. Furthermore, that is for only two years. The increase they stuck us all with is every year into the future unless and until the Legislature acts.

Next, the governor promised to appoint a property tax task force in hopes “of wrangling rising costs on Montana homeowners.” For homeowners who are struggling to come up with $500 to $1,000 extra to pay their homeowners tax bill every year, that is not much comfort. Persons with more expensive homes are definitely hit the hardest.

There is an easy fix. But the Legislature will have to meet to adopt it.  

The Legislature needs to do what the Department of Revenue told them to do before the last session of the Legislature commenced. It is the same thing that legislators have always done in the past when there is a significant increase in the appraisals of residential properties: Adjust the property tax rate.

The residential property tax rate is 1.35%. By reducing it to 0.95% it would be exactly neutral. It would be totally neutral without any increase unless your appraisal increased more than average; the average was 43% increase.  

Democrats long ago called for a one-day special legislative session to fix it but no one responded. Now it may be too late to fix this year but it is not too late to fix next year.  

The Legislature may even be able to come up with a formula to partially fix the Legislature’s failure to fix it before the first half of the 2023 taxes were due. None of the other suggestions for a special session of the Legislature included this simple fix.  

No one has expressed any reason not to reduce the residential property tax rate to neutralize the appraisal increases. Maybe this was an oversight or mistake. So why not fix it now? 

Are Republican legislators refusing to act because they don’t want to admit they made a mistake? If it was not a mistake, Republican Legislators must have refused to take action because they knew it would be a handsome tax relief for our state’s largest corporations.  

Just do what is necessary and spare nearly everyone’s huge increase in residential property taxes. It has always been done in the past. 

Tom Towe is an attorney in Billings. He served in the Montana House of Representatives for four years and in the Montana Senate for 16 years.



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