Montana renters likely left in the cold under GOP plan for property tax rebates

MISSOULA – Throughout Montana, renters make up 30% of the inhabitants, a determine that is even bigger within the state’s greater cities like Missoula, the place renters comprise greater than 50% of the inhabitants.

However the main invoice earlier than the Legislature would provide a $500 property tax rebate solely to property house owners on their major residence — down from the $1,000 rebate initially proposed in Home Invoice 222.

Jonathan Karlen, D-Missoula, stated that whereas property house owners deserve the rebate, renters should not be ignored within the equation, as they too have confronted a rise in housing prices.

“About one-third of Montanans are renters. In Missoula County it is greater than 50%,” Karlen informed members of the Home Appropriations Committee in Helena this week. “We consider it is actually essential to incorporate renters as a part of any property tax rebate. Renters have absorbed a big portion of our property tax will increase. Landlords cross that enhance on to renters.”

Karlen described his invoice (Home Invoice 258) as a tax rebate that might “present a lot wanted aid for Montana households and achieve this in a focused method.” It could present a rebate of as much as $650 on a major residence and is capped at 130% of a county’s space median revenue.

However the Appropriations committee consists of 16 republicans and simply seven Democrats, and backers of Karlen’s invoice recommend it should face an uphill climb, if it climbs in any respect. However those that do assist it see it as a extra equitable method to return cash to just about all taxpayers, not simply those that personal property.

“Each property house owners and renters alike have been affected by a pointy and fast enhance in housing prices over the previous couple years,” stated Tirza Asbell, the advocacy director for Montana Girls Vote. “Over half of extraordinarily low-income households are burdened disproportionately by these prices, spending over 50% of their revenue on housing and utilities.”

Housing markets have shifted with prices

In Missoula, the housing market has undergone important adjustments in recent times, and lots of the challenges had been exacerbated by the COVID-19 pandemic.

In 2015, 5 years earlier than the pandemic hit, the median value of a house in Missoula was $249,900 whereas the typical price of renting a two-bedroom unit was $806, in keeping with the Missoula Group of Realtors.

In final 12 months’s housing report, nevertheless, the median price of a Missoula house had climbed to $540,000 whereas the typical price of renting a two-bedroom unit reached $1,155. Property taxes throughout the state have additionally climbed alongside property values.

However some say it is unlikely {that a} rebate on property taxes will trickle right down to renters and end in financial savings.

“Renters clearly pay property taxes as a perform of paying hire, and it is actually essential that aid consists of renters,” Missoula Mayor Jordan Hess informed the Missoula Present on Friday. “They’re additionally extra cost-burdened and have seen a larger enhance in prices over the previous couple years.”

Whereas the tax-relief invoice backed by Gov. Greg Gianforte gives short-term aid in the best way of property tax rebates, Hess and another neighborhood leaders would somewhat see that income go towards long-lasting initiatives, equivalent to infrastructure.

“I do know the governor’s price range has some short-term aid, however I would somewhat see us spend money on infrastructure and in our communities,” Hess stated. “But when we will do short-term aid, then it ought to incorporate renters.”

Hess, who testified earlier than the committee on Wednesday, believes Karlen’s invoice is probably going a protracted shot. Republican lawmakers posed main questions through the listening to, with one suggesting Karlen “search your coronary heart and think about changing into a Republican.”

And whereas the Legislature would not seem like contemplating statewide tax reform this session apart from rebates, Hess and different leaders of Montana’s bigger cities have not given up hope.

On Friday, Hess stated mayors from Montana’s bigger cities have began an everyday name to debate points and methods, and how you can obtain significant change with a Republican dominated Legislature.

“I do know there is a bunch of tax coverage, and I am not optimistic about a number of the issues native governments want,” Hess stated. “However we ought to take a look at considerate property-tax reform that diversifies the income sources for native authorities. We have to begin speaking about that again and again. It in all probability will not occur this session, however we now have to maintain speaking about it so in 2025 or 2027, or someday down the street, we are able to reform our damaged tax system.”