MTFP | Gianforte Administration take Counties to Court over Tax Dispute

Do not index

Read the article at the Montana Free Press by Eric Dietrich

Excerpt:

“In their legal filing, Gianforte administration officials note that the school equalization mills were created by the Legislature decades ago in response to a lawsuit that successfully argued the state’s prior funding system failed to uphold the Montana Constitution’s guarantee of a quality education system that provides equal opportunity for each student.

“The County’s interpretation interferes with the State’s constitutional obligation to ‘fund and distribute in an equitable manner to the school districts the state’s share of the cost of the basic elementary and secondary school system,’” the Gianforte administration writes.

The Montana Department of Revenue directed counties to collect the full 95 mills in a Sept. 11 memo. The dissenting county officials, however, interpret state law as authorizing only 77.89 mills of collections this year.

If adopted statewide, the lower rate would collect $79 million a year less. At an individual scale, the difference between the two tax rates is about $104 a year for a home valued at $450,000.

“The counties are going to do what we believe the law says,” Beaverhead County Commissioner Mike McGinley said last week. “If the state of Montana wants to sue the counties to increase property taxes, then we’ll have that battle.”

It remains unclear how many counties will join the fledgling tax revolt. Commissioners from Beaverhead, Fergus, Richland and Missoula counties have told MTFP they expect their commissions to adopt the reduced rate, and also said there was wide support for that approach at a Montana Association of Counties convention last week. The association has provided county officials with briefing materials to help them evaluate the decision, but hasn’t taken a formal position on the matter.

County officials have been adamant that schools wouldn’t be harmed by reducing the tax collections, arguing that the difference would be made up by the state General Fund. The General Fund has been flush with cash in recent years as a result of above-expected income tax collections.

The Gianforte administration’s lawsuit, filed in Missoula County District Court, names Missoula County, the county commission and county treasurer as defendants. The state and Montana Department of Administration Director Misty Ann Giles, who also serves as the state treasurer, are listed as plaintiffs. The state is represented in the case by Helena attorney Matthew Cochenour.”