As he introduced one of his party’s two primary property tax relief bills on Tuesday, Democratic Representative Jonathan Karlen of Missoula warned members of the House Taxation Committee that Montanans are being priced-out of their communities. He’s carrying House Bill 143, which is say makes property tax more affordable for low-income taxpayers through a tax credit.
And with it, House Bill 155, adding a tier structure to property tax. Two Republican-backed bills are up for a hearing in the same committee tomorrow (Wednesday).
According to the Montana Free Press, Montanans saw a 21% increase in their property taxes in the past 2-years, adding $213 million in tax bills across the state.
Karlen’s bill proposes a credit calculated by income and property tax bills. Karlen said, for instance, for a taxpayer with a household income of $69,000 with a $4,000 tax bill, the tax credit would be about $1,100. He explained to the committee, “ So what this allows us to do is say, your property tax might stay the same or it might go up, but we are going to make you whole through this tax credit.”
The credit would also apply to renters, compensating for potential rent increases tied to property tax hikes.
Allen Lloyd of the Montana Association of Certified Public Attorneys was the sole opponent of 154, continuing the Association’s streak of opposing all tax credit bills in hopes of limiting tax code confusion.
Turing to House Bill 155, carried by Democratic Representative Mark Thane of Missoula, it would make the first $200,000 of commercial properties and the first $50,000 of residential properties tax-exempt. The leftover value of residential properties would be taxed at a tiered rate, from 1-to-2%.
The Montana Farm Bureau Fedration’s Nicole Rolf opposes 155, saying the shift would disproportionately affect taxpayers who own agricultural properties. She said, “ So while they may have a small decrease in their home taxes, they’re going to turn around and most likely see an increase in their class three Ag land property tax.”
Cary Hegreberg also opposed, representing the Montana Chamber of Commerce. He said there is not a large enough commercial tax base to warrant the change, and the popularity of working from home further decreases that need.
The House Taxation Committee will continue discussion on both bills, as well as the Republican-backed House Bills 231 and 213 before deciding on sending them to the full House for debate.
KGEZ 20-20 News thanks Clayton Murphy, of the University of Montana School of Journalism, for his work on this story. The Montana Broadcasters and the Newspapers Associations and the Greater Montana Foundation provided funding for these reports.