HELENA — Democrats in the Montana Legislature expressed concerns about a tax shift in the state that is putting too much pressure on residential property taxpayers. They are proposing a plan to address this issue.
“We believe it is crucial to present a proposal that will create 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, introduced three pieces of legislation they plan to propose for the 2025 legislative session:
- The first legislation would establish 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 of legislation aims to reform residential property tax rates by creating multiple brackets based on a home’s value, resulting in higher tax rates for more expensive properties.
- The third legislation would introduce a “Housing Fairness Tax Credit,” similar to an idea Karlen previously introduced. This credit would help eligible residents offset part of their property taxes if they exceed a certain percentage of the owner’s income.
“Montanans are facing rising home values beyond their control, leading to working families and seniors being priced out of their homes and communities,” Karlen stated.
Democrats estimated that the proposed plan would reduce residential property taxes by $214 million and small business taxes by another $14 million. Flowers mentioned that they plan to offset this reduction by reversing $100 million in “tax giveaways to major corporations.”
The Democrats assured 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.
As the minority party in the Legislature, Democrats criticized Gov. Greg Gianforte and majority Republicans for not taking more action last session to provide long-term property tax relief.
Republicans have highlighted the millions of dollars in property tax rebates approved in 2023, which will be available to homeowners again this year. Gianforte established a task force to study long-term responses to rising property taxes, with a report expected to be presented to him next month.
“While some Democrat politicians are using press conferences and social media to gain attention, Governor Gianforte is actively working on solutions to assist hardworking Montanans, particularly addressing the affordability crisis under the Biden administration,” said Sean Southard, Gianforte’s communications director.
