Daily Montanan - A Serious Mistake or Hidden Tax on Property Owners in Montana

There is no excuse for the Legislature not making this simple adjustment. There is no excuse for not doing the same thing that has always been done in the past. There is no excuse for not accepting the recommendation of Gov. Greg Gianforte’s Department of Revenue.

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Read the editorial at the Daily Montanan by Tom Towe, former Montana Legislator

Excerpt:

“These increases then continue every year until a new appraisal comes out. The estimates are based on numbers supplied by the Department of Revenue. The budgets have not yet been determined so there may be some slight deviations. Whether it is $235 or $1,862 a year, this constitutes a significant tax increase, particularly on higher value homes.

Worse, virtually all of the extra money collected will automatically reduce the property taxes paid by the State’s largest corporations, companies, and businesses. When residential property taxes increase, other taxpayers don’t need to pay as much to meet the budgets of the local governments. This is a very significant tax break.

This could easily have been avoided by simply reducing the tax rate. In fact, every time there was a significant increase in the appraisals in the past—since the implementation of the new Constitution—the Legislature has made an adjustment of the tax rate. That number is now 1.35% of the fair market value of your home. By reducing it to 0.94% increase in appraisals would be exactly neutral. The revenue collected from the average homeowner would be exactly the same as last year assuming the county and local budgets were the same.

I have a master’s degree in law primarily in the field of taxation. I was in the Legislature for 20 years and on the taxation committee every session but one. For a number of sessions, I was the chairman of the Senate Taxation Committee. We always made an adjustment.

In the past, legislators of both parties knew that an adjustment needed to be made every time the Department of Revenue made a significant increase in the reappraised value of homes in Montana. Until this session, this adjustment was always done for a significant increase. It was the only fair thing to do.