Results over rhetoric: Standing up for our neighbors | Jennifer Carlson

Call me crazy, but I actually think that a reduced tax rate for 99% of occupied homes is a good thing.

As a homeowner, I am keenly aware of the tax bill that arrives every November – a large, non-negotiable expense due in 30 days. Add the sticker shock of new appraisals every two years, and it’s no secret why property tax dominates the political conversation.

This year we should be celebrating the fact that from 2024 to 2026, 99% of occupied homes will see a decrease in the state-set tax rate, for most of them quite significantly. We should be glad that the Tax Foundation ranks Montana the sixth best state tax-wise. We should be proud that Montana’s spending curve has been very conservative, in actual numbers, compared to population growth and inflation. Instead, we hear falsehoods based on mental gymnastics to convince us that our State spending is out of control, our budget is “on fire,” and out-of-state house owners are being unfairly picked on.

Meanwhile our neighbors are feeling the pressure of our state’s explosive growth, and are looking for leaders who prioritize their checkbooks. What they find instead is political posturing, name-calling and creative amnesia from their elected officials.

It is time to stop the posturing and talk about the real math for the people who live and work here.

For decades, Montana homeowners have watched out-of-state buyers drive up their home values and their taxes. Simultaneously, they have experienced a 20-year shift of the tax burden sliding off large corporations — railroads, pipelines and utility giants — and onto the shoulders of residents. The numbers tell the story: In 2006, residential property accounted for 45% of the total property tax pie. By 2024, that piece had grown to around 60%. Meanwhile, the share paid by corporate "centrally assessed" giants had shriveled from roughly 30% decades ago to just 13% in 2024.

To correct this, the 2025 Legislature created a critical safety net with the Homestead Exemption. Under this plan, 99% of occupied homes in Montana will see their state tax rate decrease by 2026 (residences or long-term rentals under $4 million). For a $550,000 property, the new tiered system (SB 542) cuts the state’s tax rate by over 40% compared to the old flat rate of 1.35%. For an $800,000 home, the decrease is 31%. By dropping the rate to 0.76% for the first tier of home value, the law provides real relief for families. This tax rate cut for residential properties reduced the tax bill for 80% of residential property relative to their 2024 taxes, despite substantial and continued market appreciation for most residential properties. Most will see a lower tax bill again in December 2026. Rates were also cut for agricultural and commercial properties.

Unfortunately, some within my own party have spent the last year working overtime to disparage these results. The Freedom Caucus and segments of our state GOP leadership are calling this a "catastrophic tax shift." Legislators who voted for the bills are attacking their colleagues who also voted for the bills. Good legislators are having their personal character besmirched for putting hardworking people, just trying to afford one home, ahead of owners of vacation homes and short-term rental businesses.

For political reasons, these critics point to the final tax bill from the counties to claim the Legislature has not done enough. The Legislature does not control local budgets, bonds and mill levies — whether it is the city, county, local school district, the new gym, library, open space or the Law and Justice Center. The state only controls the taxable rate, and by slashing that rate for 99% of our neighbors, the legislature provided a massive cushion against the local spending decisions that can drive final bills higher.

There is now a lawsuit supported by these same critics to repeal this reform and return to a "flat tax." But a flat tax means raising the rate on 99% of local families just to provide a tax discount for vacant second homes and short-term rental businesses. An Airbnb is a business. A vacant second home is a luxury. Neither should be taxed at the same low rate as a local family’s primary residence. The Homestead Exemption passed the legislature with a two thirds majority and now Montana finally recognizes this difference – just as at least 40 other states do.

You may need to take action to ensure your property is covered by the Homestead Exemption. If you have not already received the automatic property tax rebate in 2025, you should take a few minutes to check on the status of your home. New homeowners, those providing long-term rentals and farm homes must verify their status and may need to enroll manually at Homestead.mt.gov by the March 1st deadline. If you are a renter, be sure your landlord knows this, and pass along the information to your friends and neighbors. If you received the property tax rebate, you should already be enrolled, but it only takes a minute to check.