HELENA — Democrats in the Montana Legislature expressed concerns about the tax shift in the state placing excessive pressure on residential property taxpayers. They are proposing a plan to address this issue.
“We believe it is crucial to introduce a proposal that will establish a more equitable tax system and provide relief to working Montanans,” said Sen. Pat Flowers, D-Belgrade, the Senate minority leader.
During a news conference at the State Capitol on Monday, Flowers and Rep. Jonathan Karlen, D-Missoula, unveiled three pieces of legislation they plan to propose for the 2025 legislative session:
· The first piece would introduce a “homestead exemption,” which would exempt the first $50,000 of a home’s value and the first $200,000 of a small business’s value from taxation.
· The second piece would revamp residential property tax rates by establishing multiple brackets based on a home’s value, with higher tax rates for more expensive properties.
· The third piece would create a “Housing Fairness Tax Credit,” similar to an idea Karlen put forward in the 2021 session. It would help offset some of eligible residents’ property taxes if they surpass a specific portion of the owner’s income.
“Montanans are facing soaring home values, leading to working families and seniors being priced out of their homes and communities,” Karlen said.
Democrats estimated that the overall plan would lower residential property taxes by $214 million and small business taxes by an additional $14 million. Flowers mentioned that they would compensate for some of the shortfall by reversing $100 million in “tax breaks for major corporations.”
Democrats indicated that due to the ability of local governments to adjust their mill levies, the proposed changes should not significantly impact city, county, or school district revenues.
Having the minority position in the Legislature, Democrats have attributed the lack of long-term property tax relief to Gov. Greg Gianforte and the majority Republicans.
“We saw it coming, knew how to prevent it, and they did nothing,” Flowers remarked.
Republicans have highlighted the millions of dollars in property tax rebates they approved in 2023, which will be available to homeowners again this year. Gianforte also established a task force to examine long-term responses to rising property taxes. The task force is expected to present a report with recommendations to Gianforte next month.
“While some Democrat politicians are engaging in press conferences and social media posts, Governor Gianforte is actively providing solutions to the challenges facing hardworking Montanans, including the affordability crisis initiated by Biden,” stated Sean Southard, Gianforte’s communications director. “The governor is pleased with the progress of the bipartisan property tax task force he initiated, particularly the discussions on capping the growth of local spending that leads to property tax hikes and offering a homestead exemption to Montana residents to ensure out-of-state owners of second homes pay their fair share for our law enforcement, schools, and infrastructure.”