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Issue Position: Property Tax

Issue Position

Location: Unknown

Don't believe the property tax rumors

By now, many Montanans have probably heard about the property tax reappraisal. Rumors are flying about everyone experiencing a big increase in their property taxes -- as much as fifty percent. As you might imagine, that kind of talk is a major concern for property owners.

I believe facts are better than rumors, and the facts just don't support this rumor. In fact, the total property taxation within the state of Montana should not change at all.

Nationally, the economy is in a downturn. It's starting to be felt here in Montana. Everyone is tightening their belt. There's just no room in the average family's budget for a big increase in property taxes.

Such a sudden and large increase would be especially challenging for our senior citizens, and others who live on fixed incomes. So the Legislature must find a way to mitigate the effects.

Here's a brief explanation of how property taxes work in Montana. Our constitution requires that we reappraise the value of all residential property every six years, so that property is being taxed based on what it's actually worth.

So when property values were reappraised recently, they had gone up since the last reappraisal. With all the talk in the media about the drop in housing prices, it might be a surprise to find that Montana's property values are so much higher. The explanation is simple though. For the past few months, property values have indeed been declining, although not as fast as in the rest of the country. But for years before that, Montana property values had been steadily increasing. The recent reappraisal showed five and a half years of increases, and only a few months of decrease. That's why, overall, values are up.

The result of an increase in a property's value would ordinarily be an increase in how much tax is owed. So when the new appraised values came in so much higher, everyone started speculating about a big bump in the tax bite.

There's more to the story, however. Even though the total valuation of all residential property in Montana went up by 50 percent, that does not mean that everyone's property tax bill would go up by 50 percent. In this legislative session, there is broad, bipartisan agreement that we must mitigate the effects of the reappraisal.

I am personally committed to keeping overall property taxation in Montana even. I know that my fellow Republicans in both the House and the Senate share that commitment. Defending Montana families from huge tax increases is at the very heart of what it means to be a Republican.

Governor Schweitzer has also promised that he will work with us to keep overall property taxation even.

How are we going to accomplish that? By lowering the property tax rate. So if the property is worth more but the tax rate is less, the net total tax should stay the same.

Now, when we talk about overall property taxation staying even, this is what we mean: the total amount of tax dollars raised from all the residential property in Montana will not increase. Some individual homes may see their total tax owed go up.

But many individuals will actually see that their tax bill decreases as a result of the change in property tax rate.

The important point is, this is far from finished. It will probably take us the whole session to get a deal hammered out. Until then, wild speculation and rumors don't serve anyone well.

I hope property owners and everyone else will follow the work of the Legislature closely. I believe our role is to be guardians of the people's checkbooks. We should not allow a big unexpected bite to be taken out of that checkbook. I encourage folks to make their concerns known to their elected representatives. It's your Legislature.

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