Following the City Commission’s vote to approve the city budget, Commissioner Rick Tryon posted a tax plan of sorts on his Facebook page outlining his ideas to solve the City’s financial woes. He did not explain in his post that the fundamental problem facing Great Falls, and all other municipalities in Montana, is the hostility of the State Legislature and the numerous statutes they have passed making it difficult for cities to govern themselves. Probably most important among those is capping increases to city budgets at one half the rate of inflation. In the interests of space, we won’t go into that here and focus instead on Tryon’s specific proposals. Below are WTF406’s responses to his specific proposals
Tryon’s Recommendation For State Government:
Exempt all homeowners 65 or older from residential property tax. This one sounds nice, because we have visions of little old grannies who can’t afford their property tax being kicked out of their family home. The reality is this would essentially let the super-wealthy off the hook for the property tax on their multi-million dollar homes. Many, if not most people, who own McMansions are also older.
Allow city/county governments to pass tourism/local option tax. Rick dropped a word in proposing this one. He should have said local option SALES tax. People like this one, because they think they will be able to tax people from out of town. Problem is you can’t really construct a sales tax like this so it doesn’t also hit local residents. And the local residents it hits the hardest are the people who can least afford it.
Reduce the residential property tax rate across the board. This is a good idea that has been done in the past to address rising property values. The legislature declined to do it in the last session, and the result is a property tax crisis across the state. Rick might want to ask the Republican legislators from Great Falls why they didn’t do this when they had a chance.
Eliminate the property tax exemption for large nonprofits that benefit from public safety services without contributing. We also think this is a good idea, particularly since it would apply to churches.
Tryon’s Recommendations for City Government
Don’t renew TIF districts that are due to expire. Tax Increment Finance Districts are a mechanism originally intended to combat urban blight and stimulate economic development. As properties in these districts are either constructed or improved, the taxes on the increased value assist with further development of needed infrastructure in those areas for the life of the district. The City gets the tax money on the additional value; it’s just that the monies must be spent on the district until the time period for the district ends, usually after 15 years. Once the district expires, all of the property taxes collected go to the general fund. Only one of the current districts will expire in the next few years, and so the prospect of getting new funding from these districts is a long way off. Tryon should know that.
Fold the 7 mil by the 1993 agreement of library funding back into the general fund for other priorities. This is nothing more than Tryon grinding his personal pet peeve. He never liked the fact that the voters passed the Library Levy. Now he sees a way to get at his political opponents through the back door.
Curtail general fund subsidies to non-performing City department enterprise funds, which would probably result in the elimination of some current city services/programs. Who could disagree with eliminating “non-performing” enterprise funds? The whole idea is that enterprise funds should be self-sustaining. The devil is in the details. Tryon provides none.
While we appreciate Tryon’s effort to stimulate discussion, the truth is he leaves the biggest issue in Montana’s tax system completely off the table. That is the consistent erosion of the income tax base by large corporations.
*Ken Toole served in the Montana Senate and was Vice Chair of the Tax Committee. He also served on the Interim Transportation and Revenue Committee. He was also the President of the Policy Institute, a Montana organization dedicated to fair taxation and reasonable energy policy