MTFP | Montana Home Owners Pay More while Some Big Business Pay Less

Do not index

Read the article at the Montana Free Press by Eric Dietrich

Excerpt

“… The median Montana residential property owner will pay about 21% more on their taxes this year than they did last year, with typical increases ranging between 11% and 35%, according to a Montana Free Press analysis of revenue department data for the 956,000 properties on the state’s property tax rolls in both 2022 and 2023. That translates into residential tax bills that will be $98 to $660 a year more.

Those increases are, however, lower on a percentage basis than those for the department’s residential valuations, which are up 40% on median this year. Reappraisal notices sent to hundreds of thousands of property owners by the revenue department this summer indicated that taxes would rise proportionately to value, using a calculation that didn’t take into account how most local property tax rates shift downward when overall tax bases grow.

In aggregate, the owners of residential properties that were on the tax rolls in both 2022 and 2023 will pay about $213 million more this year than last.

MTFP estimates that about $70 million, or a third, of that $213 million increase on existing residential properties is attributable to growth in collections of the “95 mills,” a statewide school funding equalization tax that has been subject to extensive debate as one of the few parts of property tax bills calculated in direct proportion to property values.

Residential tax growth outpaces other property types

MTFP estimates for Montana tax bills in 2023 versus 2022

Property category	Median tax bill change	Typical range of change	Total change
🏠 Residential	⬆ 21%	+11% to +35%	⬆ $213 million
🏢 Commercial	⬆ 12%	+1% to +29%	⬆ $53.9 million
🏭 Industrial	⬆ 6%	−13% to +17%	⬇ $52.9 million
🚜 Agricultural	⬇ 3%	−9% to +6%	⬆ $13.6 million
🚧 Other	⬆ 7%	−10% to +30%	⬆ $11.8 million

Notes: Typical range of change represents values between 25th and 75th percentile. Total change is for properties on both the 2022 and 2023 tax rolls only.

Tax bills for non-residential properties typically grew more slowly this year, or even declined. The median bill for office buildings, retail storefronts and other commercial properties, for example, is up a comparatively modest 12%, for a total statewide increase of $53.9 million. While some agricultural properties grew in value, the median tax bill for agricultural property is down 3%.

The median industrial property tax bill increased 6%. However, some industrial properties, including those owned by some of the state’s most prominent large companies, saw their bills decline by as much as 20%. As a result, total collections on industrial property are down by about $52.9 million.

Property taxes represent the primary source of funding in Montana for local government services including K-12 schools, law enforcement and fire departments. In comparison, state income taxes generally fund the operations of state services, including universities and prisons. Montana also remains one of the few states in the nation without a statewide sales tax…”