Speaking of Property Taxes. . .

Montana is getting hit with a massive increase in property taxes. The finger pointing is already beginning. Republicans are quick to say it’s not their fault. Legislator Greg Hertz (R-Polson), chair of the Senate Tax Committee, has an editorial floating around the state pointing the finger at local governments and, ironically, the voters themselves. Hertz says that taxes are increasing because local mill levies have been approved to support things like schools, libraries, police, and fire protection. Shame on us citizens for supporting basic public services, which the legislature under Republican control since 2009 have consistently refused to fund.

What the Republicans don’t say is that everyone knew this was coming. Not because local levies are passing all over the state (they aren’t), but because property values have been increasing dramatically. Your property tax bill is determined by your property value multiplied by your property tax rate and multiplied again by local jurisdiction mills. Most communities have not increased mills and the property tax rate has not changed. However, in most communities, the value of property has gone up significantly. That is the driver behind these increases. But Hertz and Republicans are quick to blame the voters.

Another thing the Republicans are not mentioning is that state government has been choking local governments for years, refusing to allow them to raise funds to cover services. Nowhere is the consequence of this more apparent than Great Falls and the proposed safety levy. No matter what you think of the levy, most people agree that many basic services in Great Falls are underfunded. The chickens are coming home to roost, and the city is asking people to approve a huge property tax increase. Given this controversy, the odds of that mill levy passing have declined dramatically.

The Republicans are also failing to mention the fact that they started this legislative session with a $2.5 BILLION budget surplus thanks to the Biden administration’s COVID relief efforts. Montana Republicans claimed credit for the surplus and swept a big chunk off the table for income tax rebates, up to $2,500 for joint filers. They also gave a maximum of $500 property tax rebate. Clearly the Republican program favors the wealthy.

One time “tax rebates” are usually more about politics than tax policy. Both Governors Brian Schwietzer and Steve Bullock had rebate programs, though not as big as the Republicans this time around. But rebates don’t change the fact that Montana’s tax structure is out of whack and far too dependent on residential property tax while being generous to the wealthy and big businesses.

The best way to make our tax system better is to increase income taxes on the wealthy and big corporations. Despite the fact that Montana is a relatively poor state, ranked number 34 in median household income, we are ranked in the top five for our “business friendly” tax environment by the conservative Tax Foundation. Hmmm.

The current controversy over property taxes carries with it two very concerning items. First, Republicans have always promoted a general sales tax in Montana which only pushes more tax further down the income scale, forcing people with less money to assume more of the cost of government. Second, people’s frustration with the property tax system can lead them to support “caps” like Proposition 13 in California which has decimated public services. Such a measure failed to gather enough signatures here in Montana in 2022, but a similar measure has already been submitted to the Attorney General for the 2024 election.

Department of Revenue will be holding meetings across the state to discuss the property tax increases Find the schedule here: https://mtrevenue.gov/pad-town-halls/#local