Fix Montana's homeowner property tax disaster

The first step to fixing a problem is to recognize it exists. That’s a life lesson most of us have learned that also applies to the political world. Regretfully, Montana faces a steadfast denial by the 2023 GOP legislative super majority and the governor that they created a gigantic homeowners’ property tax disaster. So many Montanans remember late 2023 when they got their shocking tax notices. It was headline news all over the state.

A politically slanted interim committee, created by the 2023 legislature, is about to pass a tax recommendation to the next legislature that would make permanent the huge homeowner property tax hit imposed back in 2023.

  Politically slanted? You bet!  Prior to the power-hungry excesses of the 2023 GOP super majority, legislative interim committees were always politically balanced — equal numbers of Democrats and Republicans. But when the 2023 super majority created the current Revenue Interim Committee, they established a partisan imbalance of 6 Republicans to 2 Democrats. That current slanted committee, dominated by the Republicans - same party that created the tax debacle - is about to make their tax craziness permanent. This from a party and governor who like to brag about being tax cutters!

The interim committee is shamefully ignoring the legislature’s policy disaster of 2023. Unless that changes and the tax rate is cut, the outrageous GOP property tax hikes imposed on Montana homeowners and small businesses will be carried forward and made permanent, “baked into the cake” forever.

In November 2022, the Revenue Department flagged the problem for the legislature, as required by law. The Department told the legislature that, following the largest appraisal jump in history, it could create revenue neutrality by simply cutting the homeowner tax rate from 1.35% to 0.94%. Something previous legislatures and governors, regardless of party control, did for decades. That would have made tax values and tax collections revenue neutral.

With the solution readily at hand, the 2023 GOP-controlled legislature refused. As a result of the inaction of the Governor and the GOP legislature, an extra $250+ million a year in property taxes were collected from Montana homeowners (that’s more than a half billion dollars for the 2-year biennium). Unless the 2025 legislature corrects the tax rate to 0.76%, this $500+ million per biennium will be collected from taxpayers forever — those increased collections will become a permanent part of our property taxes. By the end of this upcoming biennium more than a billion dollars will have been unfairly extracted from homeowners and main street businesses.

  And it keeps adding up. Over a decade those rip-off tax collections would total more than $2.5 billion dollars. Are they doing this so they can politically gain by claiming a budget surplus?

Eliminating the continuation of that multibillion-dollar tax rip-off is a simple act — the legislature just has to lower the homeowner tax rate to 0.76% going forward. That’s a remarkably simple bill changing just three numbers that could be passed within minutes.

Twice I testified before the interim committee making sure they were aware of the problem and the easy solution. So, too, did former legislator Mike Jopek from Whitefish who had carried the exact same revenue-neutral bill 16 years ago.

Regardless of anything else the legislature might do with homeowner taxes, they must first cut the tax rate to 0.76%.  Otherwise, they will leave that half-a-billion dollars/biennium of excess homeowner taxes “baked into the cake” forever.  

That’s the price we Montanans will pay for their refusal to acknowledge and correct their failure to enact the revenue neutral tax rate cut in 2023.  Just whose side are they on?

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Evan Barrett lives in Butte, retiring there after 47 years at the top levels of Montana economic development, government, politics and education. He is an award-winning producer of Montana history videos, including his most recent series: “Last Best Constitution.”