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Montana Property Tax Proposals Spark Debate as Homeowners, Farmers, and Businesses Weigh In

As property taxes in Montana continue to rise, lawmakers are deliberating several proposals aimed at easing the burden on homeowners, farmers, and businesses. While some bills promise relief, they also raise concerns about potential consequences for the state’s broader economy and property tax landscape.

Property taxes in Montana have been steadily climbing, with homeowners feeling the strain more than ever. This week, state legislators took up a series of bills aimed at reducing the property tax burden for residential property owners. The proposals range from rate reductions to more targeted relief efforts, each with its own set of benefits and challenges.

One of the key proposals comes from Governor Greg Gianforte’s office, supported by Rep. Llew Jones (R-Conrad), who introduced House Bill 231. This bill focuses on a fair distribution of tax relief across the state. Jones emphasized the importance of creating a solution that works for both urban and rural communities, ensuring equity in tax adjustments between counties on Montana’s east and west sides.

Despite its broad appeal, the bill has faced opposition, with some groups, including the Montana Chamber of Commerce, questioning certain provisions. The debate centers on how to balance the needs of homeowners with those of business owners and large corporations, all while maintaining sufficient state revenue.

A Simpler Approach: House Bill 213

Another proposal, House Bill 213, introduced by Rep. Ed Byrne (R-Bigfork), takes a more straightforward approach. It aims to reduce residential property tax rates by lowering the tax rate from 1.35% to 0.76%. The goal is to keep homeowners’ bills stable, despite the rise in property values. Byrne’s idea draws on a historical precedent in Montana, where property tax rates have been adjusted to prevent skyrocketing tax bills for residential properties.

Montana property tax increase debate

Supporters of the bill argue that it’s a simple solution to a complex problem. Ann Brodsky, a Helena resident, praised the bill’s simplicity, noting that it would prevent the kind of exorbitant property tax increases that could make homes unaffordable for many Montanans. Brodsky pointed out that homeowners are now responsible for 59% of the state’s total property tax base, a sharp increase since the last property reappraisal cycle.

However, not everyone agrees with this approach. Critics, such as Bob Story from the Montana Taxpayers Association, argue that lowering the tax rate on residential properties could create new challenges. With homes making up the largest portion of Montana’s tax base, reducing the rate could mean a larger financial gap elsewhere. Story emphasized that while homes are numerous, they also tend to be highly valuable, meaning a reduction in rates could significantly affect the state’s tax revenue.

The Backstop: Ensuring No One Gets Priced Out

A third proposal aims to protect homeowners from being priced out of their properties altogether. This proposal focuses on creating a “backstop” to ensure that no homeowner faces an unbearable tax burden. While this measure is seen as a lifeline for lower- and middle-income residents, some opponents warn that it could lead to higher taxes in the future.

Supporters believe this bill could offer crucial protections for residents who may be struggling to keep up with rising property values. At the same time, detractors argue that such a safeguard might allow property tax rates to creep up for others, ultimately shifting the tax burden onto those who are less likely to qualify for relief. The debate over this bill centers on finding a balance that protects vulnerable homeowners without unduly burdening the rest of the population.

Farmers and Small Businesses: Part of the Equation

The proposed property tax reductions are not just aimed at homeowners—they could also provide relief for small businesses and farmers. While many business owners are supportive of these measures, they worry that the bills may not go far enough to address the unique challenges they face in a state where property taxes can be unpredictable and burdensome.

Sen. Mary Ann Dunwell (D-Helena) has expressed support for including agricultural property in the tax reductions. She believes that farmers and ranchers should also benefit from any rate reductions, as they are often some of the most tax-burdened property owners in the state. Her position aligns with that of Rep. Byrne, who is advocating for an amendment to cover agricultural properties under House Bill 213.

For small businesses, the proposed tax cuts could ease some of the financial strain they have been under, particularly as Montana’s economy continues to rely heavily on its residential property tax base. Small business owners are hoping that any changes to the property tax law will help stabilize their costs and provide a more predictable financial environment.

The Road Ahead

As the legislative session moves forward, lawmakers will continue to debate the various property tax proposals, trying to find the right balance between providing relief to homeowners and maintaining adequate state revenue. For now, it’s clear that Montanans are deeply divided on the issue, with homeowners, farmers, businesses, and legislators all offering different perspectives on the best way to reform the state’s property tax system.

With the future of property tax reform in Montana hanging in the balance, many are waiting to see which proposals will ultimately make it through the legislative process. The stakes are high, as any change to the property tax law could have lasting implications for the state’s economy, property owners, and residents alike.

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