Montana's new misguided tax policy burdens homeowners

Montanans recently received an unpleasant reminder of the perils of bad tax policy in their mail. Spending significant amounts of time in Granite County, I had the displeasure of seeing friends and family face average reappraisals topping 60 percent.

Suppose we dive into tax policy developed by the Montana legislative super-majority. We’ll discover a distressing pattern: Working-class homeowners are subjected to massive permanent tax increases, while large corporations enjoy tax relief offset by the aforementioned workers. It parallels actions by the Public Service Commission which recently suggested that residential energy customers and small businesses be subjected to higher rate increases than large out-of-state corporate clients.

This shift in the tax burden, coupled with the permanent nature of property tax hikes, exemplifies current leadership’s failure to launch since obtaining a super-majority.

Montana’s super-majority convened the Legislature in January with an unprecedented surplus, courtesy of federal government assistance. Yet, instead of prioritizing meaningful relief for the people of Montana, the focus turned to tax cuts that predominantly benefit well-heeled corporations and owners of luxury homes.

Of note, the average Montanan doesn’t enjoy substantial capital gains, or own expensive business equipment, rendering such tax cuts irrelevant to their daily lives. While tax reductions were promised for everyone, the reality is that the burden of permanent property tax increases weighs heavily on homeowners. Any rebates proposed by the majority are more than canceled by these permanent tax increases.

And they knew this was coming.

The most troubling aspect of our situation is how well aware they were of the pending damage. In November 2022, the Montana Department of Revenue released its official warning, recommending that the legislature drop the tax rate to 0.94 percent. It was a clear and unmistakable message that Montanans needed assistance going into a reappraisal during the most significant short-term property value increase in state history. That warning was ignored.

Many Montanans are ill-equipped to overcome this burden due to age and a lack of resources. Unlike tax rebates seen under prior governors, like Marc Racicot and Brian Schweitzer, Montana’s modern majority chose to force Montanans through the existing labyrinthian maze of government bureaucracy rather than simplify the process, stalling would-be recipients. While we requested red-tape reduction to incentivize business, they replaced it with duct tape for homeowners.

The distribution of the tax burden reveals a flawed approach from Montana’s super-majority. Champions of tax reductions, in reality, legislators shifted the tax burden to working-class personal residences. Large corporations are enjoying decreases in their tax obligations. This regressive tax policy disproportionately affects lower-income individuals and exacerbates existing inequalities.

Concrete figures paint a stark picture of the impact on Montana homeowners. In 2022, residential property owners paid approximately 52 percent of the total property taxes in Montana, amounting to more than $1 billion. However, now homeowners will bear an additional 5-6 percent of the total tax burden. Remarkably, large corporate and industrial entities will witness a reduction in their property taxes from $601 million to $556 million.

These ill-conceived policies extend beyond figures. They undermine the principles of fairness and equity that allowed Montana’s middle class to thrive. Hardworking Montanans, including retirees, are disadvantaged, while large, frequently out-of-state corporations emerge as the winners in an unbalanced equation.

Gov. Greg Gianforte and the super-majority desperately need a reevaluation of priorities. Montanans demand accountability from our elected officials. We urge policymakers to rectify their mistakes by returning to Helena for a special session and finishing the job they should have finished months ago.

A prosperous Montana is built by creating policies prioritizing all citizens’ interests. Crumbling to pressure from a governor intent on enriching a small class of corporate exploiters will only push our state further from its reputation for cooperative fairness and fiscal responsibility.

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Jesse Mullen founded Mullen Newspaper Company, based in Deer Lodge, and serves on the board of BrandMT, an electoral education non-profit. He is the chair of the Powell County Montana Democratic Central Committee. He is scheduled to speak on Freedom of Information Act issues and right-to-know at Hill County Democrats Politics in the Parks July 29 at Pepin Park.