A new web-based calculator lets you figure out how much your property tax is going up and how much the property tax for big corporations are going down thanks to the Republican Legislature and the Gianforte administration.
There is lots of misinformation floating around about what is happening to residential property tax bills. Most of it is coming from Republicans in the legislature and the Gianforte Administration trying to shift the blame for what happened during the last legislative session. Here is an editorial we ran explaining what happened and why our property taxes are going up.
Now you can see exactly how much your property taxes are going up and, even more important, how much the taxes for other classes of property are going down. Below is an example of a house in Anaconda. You can get the same information about your home by going to www.taxshiftmt.com Check it out!
By Ken Toole
I’m writing to respond to a recent opinion column from Brendan Beatty, the Montana Department of Revenue Director, explaining the property tax mess in Montana. I’m still trying to decide if he really doesn’t understand the property tax system or if he is engaging in an lame attempt to provide cover for the Republican legislature and Governor’s office.
Though everyone talks about how complicated property taxes are, the basic framework is simple. Your property tax is determined by the value of your property times the state tax rate times mills levied by state and local governments. We all understand that property values are going up dramatically, and there isn’t much we can do about that. Changing mills is also difficult, because many of the mills are statutory and the remainder depends on local governments acting.
But we can control the state tax rate people pay for residential property.
By doing nothing, the Governor and supermajority Republicans ensured that residential property taxes will increase while other classes, that are already getting hefty tax breaks from the 2023 Legislature, will see their taxes drop even more significantly.
We have seen rapid appreciation of values before. In the past, the legislature has addressed increased values by reducing the state residential property tax rate. Everyone knew this was coming, and there were several bills in the legislature to address the issue this way. In their wisdom, the Republican supermajority decided not to act.
Surprisingly, Beatty’s editorial only addressed the mills portion of the equation. There’s a reason for that.
There are currently 18 different classes of property in Montana. Each one is taxed at its own rate. Imagine a big pie with 18 slices. The increased residential values is essentially adding more filling to one piece of that pie – our residential property taxes. We can’t make the pie much bigger because of caps put in place by the legislature. The only option is to shuffle things around within the pie. But if you do that, you end up increasing the size of other pieces of pie, and their taxes go up. When the value of residential property increases like this and you leave the tax rate for residential property the same, other classes of property end up paying less.
By refusing to adjust the residential tax rate, the Governor and legislators protected corporate property payers like NorthWestern Energy and Burlington Northern while letting residential property taxes increase dramatically. Imagine that!
Now let’s talk a little about politics. There are numerous organizations dedicated to representing other classes of property. Those organizations have things like offices, budgets and lobbyists. Naturally these folks don’t want to see their state property tax rate go up. There is no organization for residential property taxpayers.
Importantly, the priority of the Republicans has always been to protect and promote corporate interests. They have reduced business equipment taxes, capital gains taxes, taxes on investment income, and on the list goes. All of these things have increased taxes on the rest of us and reduced the quality of our public services. The only tax they like is a general sales tax which falls heavily on consumers.
We can’t change the increase in residential property values. The state mill part of the equation is mostly statutory and difficult to change. If you eliminate the option of changing the tax rate for residential property because you don’t want to increase taxes on corporations, you are left with reducing local mills. That means pointing your finger at local governments, and somewhat ironically, the voters themselves.
That’s exactly what Republicans are doing.
Like cats in a litter box, the Gianforte administration and Republican legislative leadership are scrambling to cover their mess. The increase in residential property taxes isn’t a surprise. It isn’t an accident or oversight. They knew this was coming, and they refused to do anything about it, because their priority is taking care of corporate board rooms.
Ken Toole served on the Senate Taxation Committee 2001 and 2003 and was the vice chair of that Committee in 2005. He also served on the Revenue and Transportation Interim Committee in 2005. He was elected to the Montana Public Service Commission in 2006. He was the founder and Executive Director of the Policy Institute, a Montana Non-profit group that worked on tax and energy policy in Montana. He now has a small farm outside Cascade and writes occasionally for WTF406.com a political blog in Great Falls.
Originally featured in The Daily Montanan here: https://dailymontanan.com/2023/07/26/big-corporations-get-tax-benefits-while-montana-resident-get-higher-property-taxes/
WTF406.com has written numerous posts about Republican Senator Jeremy Trebas’ commercial property on 1st Avenue North. A quick recap:
–Trebas bought property at 1300 1st Avenue North in May 0f 2022. The property was classified as a church when he bought it. Trebas’ continued to enjoy the property tax classification as a church even though he did not qualify for the exemption. His annual property tax bill was just under $550 per year.
–The building was also in violation of fire codes, because it did not have an adequate fire suppression system. Rather than complete the needed work, Trebas introduced a bill in the Montana Senate that would have exempted his property. The bill was vehemently opposed by Fire Marshals across the state and died in the legislative process.
–After the legislative session (and his failed attempt to change the law to favor his pocket book) Trebas put the building on the market for $475,000.
Despite the fact that WTF406 notified the Department of Revenue of concerns about the misclassification of Trebas’ building, it appeared that no adjustments were made by May. WTF406 wrote a formal letter to the Department of Revenue and local officials on June 1st asking that the property be reclassified and that Trebas’ property tax obligation be adjusted accordingly. In a follow-up phone call, the Department of Revenue informed WTF406 that the building had been reclassified, and that Trebas’ property tax obligation for the coming tax year would be $6,343.32. That’s quite a jump from the $535 he had been paying.
A quick review of current real estate listings in Great Falls on July 10 reveals that the building is still for sale. Right after the legislative session, Trebas was seeking $475,000. Real Estate Dot Com on July 10 lists the property for sale for $281,227. Of course we don’t have access to the details of his finances, but it seems Trebas is trying to unload an albatross around his neck. Couldn’t happen to a nicer guy!
What The Funk sent the following letter to the Department of Revenue on June 1, 2023.
June 1, 2023
Montana Dept of Revenue
Great Falls Office
300 Central Ave # 520
Great Falls, MT 59401
Re: Misclassification of Senator Jeremy Trebas’ Property
I am writing regarding the misclassification of property owned by Republican Senator Jeremy Trebas (through Rear View Mirror LLC) at 1300 1st Avenue North in Great Falls. We notified you months ago that the property does not appear to qualify for a religious exemption from property taxes and provided the following article which gives the relevant information and details.
As of May 28, 2023 we note that the property is still listed as exempt property on the Montana Cadastral Map, approximately a full year after Trebas purchased the property. He is currently paying $535.58 per year on a commercial property valued at $359,505. Far below what he should be paying.
We are surprised that the Department of Revenue has not adjusted his property tax classification. This is unfair to other taxpayers in the community and is depriving tax jurisdictions of revenue. Trebas also introduced a bill in the Senate attempting to exempt this property from needed repairs to bring it up to safety codes. Though the bill failed, it is quite apparent he is not above trying to play the system to his own advantage. https://wtf406.com/2023/01/jeremy-trebas-the-self-dealing-senator/
We request that you adjust his classification immediately and make sure he pays the difference for the year he has owned the property. If, for some reason, either the cadastral map or Webtax site are in error or you believe the property is properly classified as an exempt property, please let us know.
CC: Property Tax Division Administrator, MT Department of Revenue,
Cascade County Commission, Mayor of Great Falls
Below are links to our previous posts on this topic.
The Curious Case of Jeremy Trebas’ Property Taxes
Jeremy Trebas The Self-Dealing Senator
The Continuing Saga of Senator Trebas’ Dirty Real Estate Deal
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
By Ken Toole:
NorthWestern Energy customers are about to get shocked with a huge increase in their electric rates if the Public Service Commission grants NorthWestern Energy’s request to increase residential rates. The public hearings are over and final legal briefs are being submitted. But, like a cancer waiting to metastasize, it has not gone away, and it will wreak havoc on the very people who can least afford it.
Don’t be fooled by efforts to minimize the impact of this rate case. Residential customers are facing a 28% increase in their rates compared to a year ago. And thanks to a “negotiated settlement” reached by the big guys (the utility, the state, and large customers) large users won’t see any increase at all. Bottom line this increase falls unfairly on small customers like you and me.
The average residential customer will have to come up with an additional $284 annually or more. Some people may be able to afford it. Some folks can go out and find another job to make ends meet but lots of people can’t do that…particularly Montana seniors. They will be choosing between paying their power bill, buying food, paying rent or purchasing medicine.
While we are waiting to hear how much residential rates will increase, large investors are buying up NorthWestern stock. On May 15 Market Beat reported that six “institutional investors” are increasing their holdings of NorthWestern stock. They are watching this rate case and they like what they see — for stockholders.
The corporate largesse doesn’t end with investors’ stock purchases. In 2022 NorthWestern CEO, Bob Rowe, received over $3.3 million in total compensation. Rowe, now retired, has been replaced by the former Chief Operations Officer, Brian Bird. In 2022 Bird made over $2.6 million. For comparison, Mark Johnson, the manager of the state’s largest electric co-op, makes a little over $450 thousand per year.
While you let that soak in, remember that large customers have cut a deal with NorthWestern Energy which lets them off the hook completely. They will be seeing no increase. We are talking about oil refineries, mining companies and large retailers, many of them owned by multinational corporations. Doesn’t seem fair, does it?
So, all that stands between small customers and an expensive and unfair rate increase is the Montana Public Service Commission. They alone have the power to stop or adjust this rate increase. In addition to all five members belonging to the Republican Party with its long history of supporting big corporations, the PSC has been a dysfunctional circus sideshow, dominated by bickering and in fighting. Commissioner Bukacek was recently quoted in the Billings Gazette saying, “This historic unprecedented increase that people are talking about, it’s $25 to $30 a month. That’s the cost of three to four dozen eggs.” Seems like it’s no big deal to her. Of course, she makes over $100,000 per year and has a medical practice on the side.
But there is cause to think the PSC might do the right thing and reject the “settlement” being proposed by some of the players. Several of the commissioners have established that they are no friends of the utility companies. Those members may be able to bring along others to build a majority. But they all need to hear from residential customers here in Montana. Call, email, write a postcard, let the PSC know that people are concerned, and people are watching.
Why are these men smiling?