BILLINGS — In a Thursday letter to Governor Greg Gianforte (R), Democratic state senators requested a one-day special session, proposing a bill that could bring down estimated property taxes. Those estimates shocked many across the state.
Montana property tax estimates were sent out in late June, stunning residents.
“When I initially bought my home, I thought it was reasonable,” said Kevin Whitehead, a Billings resident, on Friday. “But 40%, that number jumps out as extremely high. And that makes my spidey senses kind of tingle.”
On Thursday, Democratic lawmakers sent the following letter to Gov. Gianforte with a special request.
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MTN News
Page one of two of the letter to the governor
“I think the governor can, at any time, call a special session, which is why this letter came to be,” said Rep. Emma Kerr-Carpenter, D-Billings. “He can frame the call however he wants.”
The letter called for a one-day, single-bill special session as a last-ditch effort to lower property taxes.
MTN News
Page two of two of the letter to the governor
“The last time there was a special session, we know it was in 2017. And that was to address kind of a deeper and bigger problem,” Kerr-Carpenter said. “This is not a normal way of doing business, I’d say. But again, you know, we’re living in extraordinary times.”
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Kerr-Carpenter said the Democrats prepared a bill to introduce if the governor agrees to the special session.
MTN News
Rep. Emma Kerr-Carpenter
“They have a two-page bill ready to go that would create a revenue-neutral property tax system,” Kerr-Carpenter said. “Basically, it would mean that our property taxes would, for this re-appraisal cycle, only go to cover our current expenses and we wouldn’t see this skyrocketing amount.”
According to the letter, a revenue-neutral property tax rate was recommended by the Montana Department of Revenue (DOR) to legislators during the 68th Montana Legislative Session, but was not adopted. The letter also states that by failing to adopt the DOR’s recommendation, the state’s share of property taxes skyrocketed.
“Property taxes were a constant conversation throughout the legislature because everybody knows it’s a problem. It’s been a problem for years,” Kerr-Carpenter said.
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But Republicans say they’ve already handled the issue another way.
“We’ve already taken care of that through property tax rebates. Which the Republicans, and only two Democrats, supported,” said Sen. Greg Hertz, R-Polson. “The rebate’s that you’ll be getting this fall, that is directed only to Montana residents, will more than cover the state’s 15% share of the property tax increase. What the Democrats are proposing would benefit Montana non-resident taxpayers.”
According to Hertz, the estimates sent out might not accurately reflect what your property taxes will be.
“What you have to keep in mind, appraisals are used to allocate taxes. The local governments and the schools then set their budgets that requires a certain tax level. Those taxes are then allocated based on your appraisal,” Hertz said. “So appraisals don’t directly mean that your taxes are going up. In fact, your appraisal could go down, and your taxes could still go up, depending on what the schools and the local governments do with their budgets.”
MTN News
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Greg Hertz
Hertz said he doesn’t see the governor agreeing to this request.
“I think he’s clear that he’s not calling the special session,” Hertz said. “We need to focus on what’s going on at your local government and your schools. 85% of your property taxes go to local governments and schools. So Montana taxpayers concerned about the property taxes need to start attending budget meetings in the next few months.”
A response from Gov. Gianforte’s office makes a special session seem unlikely.
“Knowing that Montanans’ property taxes are too high, Governor Gianforte and Republican legislators came into the legislative session with a plan to rein in property taxes and provide hardworking Montanans with property tax rebates to ease the burden,” Kaitlin Price, a spokesperson for the governor’s office, said in part in a written statement. “The governor is committed to building on recent reforms and rebates to bring down property taxes which are far too high, and he urges county commissioners and other local leaders to exercise fiscal responsibility and limit the growth of Montanans’ property taxes.”
Kelsey Merison/MTN News
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Letter to the governor
For now, the sides seem far apart on yet another issue.
“The Democrats, all during the session, opposed all of the proposed property tax relief and rebates that the Republicans offered,” Hertz said. “And now they seem to want to become engaged. I think this is more about politics and less about getting things done.”
Kerr-Carpenter disagrees.
“We need to be putting Montana property owners first and Montana renters first. There’s solutions that would go and fix this for everyone. Instead, we’re only looking at short-term solutions,” Kerr-Carpenter said. “I’m not interested in that. I’m interested in the long-term.”
Montana — After another successful season for Los Blancos, Carlo Ancelotti is spending some time in The Treasure State.
Over the past few days, Real Madrid Coach Carlo Ancelotti has shared some photos from a vacation with his spouse, Mariann Barrena McClay, in Montana. They have spent some time horseback riding and checking out the Sawmill Saloon in Darby.
This vacation follows a trophy-filled season at Real Madrid, during which they won La Liga, the Champions League, and the Spanish Super Cup. They probably feel alright about their chances next season, considering that Mbappe is joining the squad.
The small town of Darby, situated on Montana Highway 93, recorded a population of 783 in the 2020 census. The town is home to logging and rodeo events, along with a farmer’s market. In July, they host a Bluegrass and Strawberry Festivals. The closest ski area to Darby is Lost Trail Powder Mountain, which is in Idaho and Montana.
Image Credits: Carlo Ancelotti, Visit Darby (Image above)
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More by Ian Wood
The upcoming property tax year could be a little easier on homeowners and renters than last year.
The operative word in that sentence is could. Here’s why this year could be easier, not a slam-dunk “will be easier.”
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Three policy-generated numbers mathematically merge in a complex equation to determine what you pay in property taxes: 1) the state’s assessed value of your property; 2) the state’s tax rate applied to your property; and 3) every city and county’s total ask in taxes for the year (for the sake of simplicity, schools won’t be part of this particular explanation).
Cities and counties determine the size of the property tax pie (No. 3); state policy determines the size of your slice (Nos. 1 and 2). State law already caps how much cities and counties can increase the size of the pie, with a few exceptions falling outside of that cap, including voted bonds and levies and new properties that have come online in the last year.
2024 is not a reappraisal year, so the value of your home will not go up, for tax purposes. The Legislature also won’t meet this year, so the residential property rate will remain at 1.35%. So, for many jurisdictions across the state, if there are no voted bonds or levies, residential property taxes should only increase by the statutorily mandated one-half of the 3-year average of inflation. That should be the case, but it won’t be. Given that the tax pie is finite, if one piece gets smaller, another must get bigger.
There are 16 classifications of property, each with a different appraisal method and tax rate. The centrally assessed tax classification (telecoms, railroads, pipelines, airlines and NorthWestern Energy) appeal their valuations every year, regardless of where we are in the re-appraisal cycle. This process is underway, and they had until June 20 to submit their protests. These industries have deployed fleets of attorneys to Helena to contest their valuations. These negotiations happen behind closed doors and are always successful in reducing values for these industries.
This dramatically affects residential property taxpayers. When corporations in these industries successfully argue for a reduction in their value, they reduce the taxes they pay and increase yours. When the national telecoms, railroads, airlines, pipelines and NorthWestern Energy get a tax break in Montana, the size of their piece of the property tax pie gets smaller. That means someone else’s piece necessarily gets bigger – yours. When these corporations’ property taxes go down, yours go up. Residential taxpayers cover the costs of tax breaks for the centrally assessed industries. Even if cities’ and counties’ total tax levies remain the same this year, the state granting a reduction in value for centrally assessed property will make residential property taxes go up.
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But it doesn’t have to be this way.
If the centrally assessed industries were to acknowledge the massive property tax gut punch for homeowners and renters in 2023 and just sit out this round of appeals, that could really help your 2024 property taxes. For many of these national corporations, Montana is a tiny piece of their market. These reductions won’t matter much for them, but the property tax increases for Montanans sure will.
National telecoms, railroads, pipelines, airlines and NorthWestern Energy should just say no when it comes to appealing their respective valuations. The Montana employees and customers who need to afford to live here deserve your consideration more than your shareholders.
That’s not the only way to avoid this situation, though. If the Department of Revenue, at the direction of the governor, didn’t cave during these negotiations but instead stood tall for homeowners and renters and didn’t reduce these valuations, that could keep your property taxes down.
The state’s Property Tax Task Force is meeting now. Productive property tax conversations are happening in interim legislative committees and across the state. But 2025 is a long way off in terms of relief. Things could be better this year. National telecoms, railroads, airlines, pipelines and NorthWestern Energy should not appeal their valuations. And if they do, the Department of Revenue should make the negotiations public.
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That actually would help.
Missoula County Commissioners Dave Strohmaier, Juanita Vero and Josh Slotnick.
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