25 August 2023 — 2059 mdt
The Republican-Tax-Montana-Homeowners-Program
Will Be Hitting Your Mailbox Soon
Guest essay by Ann Brodsky
Ever since Democrats shined a spotlight on the historic residential property tax increases that are coming your way, Republicans have been trying every which way to shift the blame from themselves. It’s the local governments raising your taxes, they cry! We should be grateful for the one-time partial rebate, they declare! More recently, they’ve been proclaiming we need a property tax overhaul in 2025!
According to Montana’s Revenue Department, homeowner property taxes across the state will rise approximately $200 million annually, on a permanent basis, because the legislature failed to adjust a simple statutory formula when home values rose. By failing to neutralize your tax rates, the Republicans-in-Charge (of both the executive and legislative branches) guaranteed their Tax-Montana-Homeowners-Program will arrive at your doorstep soon in the form of your 2023 property tax bill.
A history lesson provides valuable insight. Prior to deregulation (1997) [note 1], Montana homeowners were responsible for about one third of Montana’s property taxes. This number gradually increased from 40% to 49% between 2000 and 2020. Since 2020 — all three years under the watch of Gianforte and the Republican legislature — homeowners’ share of the property tax base increased from 49% to a whopping 58%! In the time I’ve owned my home in Helena, homeowners’ share of the tax base went from 1/3 to almost 2/3 of the property tax base.
If this weren’t bad enough, while residential property taxes are rising, big businesses’ property taxes are going down! That’s right. Because of the way the formulas work, while residential property taxes skyrocket, property taxes on metal mines, business equipment, railroads, airlines, telecommunications, electric utilities, pipelines, and others DECREASE. Of course, you won’t see this tax shift on your property tax bill, but you can find it here: https://leg.mt.gov/content/Publications/fiscal/2025-Biennium/MARA/95-mills-Reappraisal-Effects-MARA-August-2023.pdf.
It’s important for you to know your upcoming property tax increase is not the fault of local governments. Absent voter-approved new levies, local governments can only increase their property tax revenue by half the rate of inflation the past three years. Indeed, the vast majority of your property tax increase will go either to the State’s coffers ($81 million/year) or to the tax shift from large corporations to homeowners. Let me give you an example: the estimated increase for my home is $873 this year. Of that, only $46 is new tax revenue for local governments! The real winners are $264 estimated to go to the State and $562 to make up for the decrease in taxes for big corporations! So what underlies the increased taxes on your tax bill is not an increase to local government, but a big tax SHIFT — all because the statutory formula was not changed by the 2023 Legislature – as had occurred in the past when home values went up.
As for the rebates, if you’re lucky enough to get one, they’re temporary and don’t address the permanent shift to homeowners beginning this November.
Recently, I’ve heard Republicans declare Montana’s property taxes need a big overhaul in 2025. While that may be true, what kept them from enacting a big overhaul when they had a Super Majority in 2023? My greatest concern is that their starting point will be the current system, under which homeowners are now responsible for almost 60% of all property taxes in Montana. Not a good place from which Democrats will have to negotiate.
Earlier this summer, Democrats asked the Governor to call a one-day special session to amend one statute to neutralize homeowners’ property taxes in the face of increased home values — exactly as the Governor’s Revenue Department proposed in November 2022. Instead, Gianforte not only failed Montana homeowners in the session, he failed them again when he didn’t even have the courtesy to respond to the request.
Fool me once, shame on you. Fool me twice, …. You know how that goes. Every day the Governor fails to call a special session to fix this disaster, he continues the Republican-Tax-Montana-Homeowners-Program for property taxes. This is not an accident or omission. This is intentional, and homeowners are going broke. It’s a calamitous path, but it didn’t and still doesn’t have to be that way.
Ann Brodsky is a retired attorney. She has owned homes in Helena since 1980 and has lived in her current home since 1998. She served as Governor Schweitzer’s Chief Legal Counsel for 8 years and, before going to UM law school, worked 5 years for the Legislature as a bill drafter and researcher.
Note 1. By James Conner. Montana’s investor owned utilities were deregulated under Republican Governor Marc Racicot with disastrous results.