No clear path forward for property tax relief in final days of MT legislative session

With just 20 possible days left in the Montana legislative session, lawmakers are at an impasse on how to provide property tax relief, one of the most important tasks before the Legislature this session.

Gov. Greg Gianforte and countless legislators have continually said they received a “mandate” from Montanans this session to provide long-term remedies to the spikes in property taxes state residents saw over the last couple years.

Most legislators are optimistic that meaningful property tax relief will be passed, but some believe there’s a possibility the Legislature adjourns.

“Montanans are expecting action on this issue,” Gianforte said at a recent press conference. “We need permanent property tax relief in this session. Frankly, none of us can leave here until we do that.”

But despite repeated assertations that Montanans need relief and the fact that property taxes are set to rise again, legislators have yet to coalesce around any one bill, let alone a general approach, to addressing the issue.

“It’s all over the place,” said Senate Taxation Committee chairman Sen. Greg Hertz, R-Polson. “There’s just no consensus at this point.”

As lawmakers were campaigning last year, increased property tax bills were definitively the number one issue residents were concerned about.

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Property tax bills are set to rise again by an average of 11% statewide, and counties in eastern Montana are likely to see larger proportional increases this cycle, according to projections by the Department of Revenue.

Those increases come on the heels of a 21% average increase in property tax bills last reappraisal cycle that put many residents in a financial pinch, particularly those on fixed incomes.

Susan DeCamp retired from working for the federal government in 2020, five years after purchasing her home in Billings. She’s living on a fixed income and plans to sell her home because she can no longer afford the increased property tax or mortgage payments.

“It's bleak,” she said. “I expected the world to be a better place.”

DeCamp is resigned to selling her home, but it is unclear what comes next for her. For the time being, she is tied to Billings because her mother is in a retirement community in the city.

Because of the way Montana levies its property taxes, it is difficult to take the burden off homeowners without shifting the burden onto other property classes like small businesses, agricultural landowners and large companies.

Lawmakers do have a choice on whether or not to lower property tax assessment rates, though rates alone do not determine property tax bills. Local government budgets, school budgets, voter-approved mill levies, housing supply and a slew of other factors impact the dollar amount on a property tax bill.

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There are many schools of thought on the best way to address rising property tax bills: Some — mostly Republicans — want to address it at the local spending level; others believe the issue should be addressed entirely through rate adjustments, and others see it as a mixture of the two.

No lawmakers or lobbyists interviewed for this story said they felt there was any momentum behind any certain bill or philosophy at this point in the session.

“We all feel that we have an obligation to actually provide permanent property tax relief. Permanent,” said Sen. Laura Smith, D-Helena. “We’re running up against the 11th hour here and we owe our constituents that”

Major property tax proposals from both sides of the aisle were voted down in recent weeks, including House Bill 231, the bill that emerged after months of work as the centerpiece of the governor’s Property Tax Task Force.

A legislative committee voted to table that bill and others, meaning they are not entirely dead but are not moving forward through the legislative process for the time being. In the Montana Legislature, no bills officially die until the body adjourns.

“This is the process. It shouldn’t just be what the task force came up with,” said Senate President Matt Regier, who opposes HB 231. “That’s not what we’re sent here to do.”

Before the huge spikes in property tax bills last legislative session, lawmakers chose not to cut the rates to ease the burden, and instead opted to send homeowners rebate checks for up to $675 in 2023 and 2024. But Columbus Republican Sen. Forrest Mandeville said that on “day one” of the 2023 legislative session, lawmakers were discussing rebates.

“Rebates were kind of the key word last session,” he said. “The thing on property tax relief this session was [to] come up with something more sustainable.”

As the session drags on without a major property tax bill close to the governor’s desk, legislators appear to be coming to terms with the fact that rebates — checks sent to certain Montana homeowners meant to supplement their property tax payments — may also be necessary this year.

Gianforte, who saw his mid-February deadline for a relief bill to be on his desk come and go, signaled some openness to rebates, but solely as a “stop gap” measure on the way to permanent relief.

“I think it’s one of the ingredients in the stew,” he said.

Many lawmakers on both sides of the aisle have been hesitant about focusing on rebates, saying they would rather provide relief by championing legislation that addresses the system itself.

“It’s insufficient,” said Elizabeth Marum, a longtime Belgrade homeowner. “When taxes go up $2,000 to $2,500 and you get a $625 check back, it’s insulting.”

Marum has owned her home in Gallatin County — an area hit particularly hard by property tax increases — since 1998, at which point she was paying just over $1,600 a year in property taxes, according to county records. In 2023, she paid three times that — more than $4,800.

“I was freaked out,” she recalled.

Marum, a one-time Democratic legislative candidate, retired after ending her career at Montana State University, and relies on Social Security, her pension and some savings to pay the bills, which includes medical bills for her cancer treatment.

“It's scary,” she said. “It’s scary and it’s nerve wracking.”

Marum said “it’s really concerning” the Legislature does not have a clear path forward on property taxes, adding that she likes both the Gianforte-backed HB 231 and the Democrats' key property tax bill, House Bill 155, which is still alive.

If residents don’t get relief, “there’s going to be a property tax revolt,” Marum added.

There’s also an understanding among lawmakers that any backlash may come in the form of voting for a constitutional amendment that would limit the amount a property’s value can grow by each year. Opponents of this approach, of which there are many, say the proposed citizen-led amendment stands to harm funding for public schools, law enforcement, firefighting and other local necessities that property taxes fund.

The Legislature’s constitutional 90-day deadline is currently May 5, but there are rumors percolating that lawmakers will adjourn before then. Passing mentions of a special session to address property taxes if they can’t get it done in the next couple weeks have been floating around the Capitol halls. But some lawmakers are still optimistic.

“We’re always just a few votes away from putting a bill on the governor’s desk,” Regier said.