HELENA — Across Montana, residents are starting to see their official property tax bills – for the first time since a spike in assessed property values, announced earlier this year.
As property taxes remain top-of-mind for many Montanans, the state Legislature’s Revenue Interim Committee is in the midst of studying the issue. During a meeting Thursday, lawmakers talked about their own tax bills – specifically how the increases in taxes compared to the increases in their properties’ taxable values.
That comparison varied significantly. Sen. Greg Hertz, R-Polson, said he has properties in Flathead and Sanders Counties that rose more than 40% in taxable value, but saw tax increases of 3% and 18% respectively. Sen. Becky Beard, R-Elliston, said her home in Powell County rose 46% in value, but her tax liability increased by 59%.
“What is becoming apparent, I think to everybody, is if your property went up 40%, 43%, that doesn’t necessarily equate to your taxes going up,” Hertz said. “In fact, from county to county, there are significant differences in how much tax bills went up, and I think that points to the direction as to what’s going on in that particular county, what local budgets are happening, what’s going on with other taxable values.”
In many cases, property taxes didn’t rise as much as taxable values did because local governments reduced how many mills they assessed on each property as the value of a single mill rose. However, the value of one mill depends on all classes of property – including things like agricultural land, forest land, mines and utilities, as well as residential and commercial property – so a drop in taxable value in those classes could lead to a higher share of the tax burden landing on residential property.
In addition, 49 counties voted to charge only 77.9 mills for school equalization funding, instead of 95 as in previous years, as part of an ongoing dispute between the state and counties that’s likely to be resolved in court.
During Thursday’s meeting, lawmakers talked about the challenges of comparing property tax data across counties, since they don’t all use the same systems.
“We need something that’s more uniform, understandable,” said Rep. Paul Fielder, R-Thompson Falls.
The committee also heard an update on the tax rebates that went out to Montana taxpayers this year. The Legislature approved up to $1,250 per individual in income tax rebates, and up to $675 each of the next two years in property tax rebates on Montana homeowners’ primary residences.
The Montana Department of Revenue reported issuing more than 467,000 income tax rebates, for a total of more than $482 million. Property owners had to file an application to claim the property tax rebate. Revenue leaders said they received more than 227,000 applications and approved almost 216,000, for a total of more than $141 million.
During the legislative session, an initial fiscal analysis said roughly 290,000 property owners might be eligible for the property tax rebate. On Thursday, Derek Bell, administrator of Revenue’s Business and Income Taxes Division, told lawmakers the department now believes that estimate was too high. He said it was based on a U.S. Census estimate of owner-occupied residences in the state, but that that number likely included some ineligible properties – like those owned by entities instead of individuals, people who own multiple properties, and those who didn’t live at the home long enough to qualify.
“We think we don’t have a perfect number, and to be honest with you, I don’t know that we ever will have a perfect number, but our suspicion is that 230,000 is probably pretty close to where we think we should be – and again, we’ve received 227,000 applications today,” Bell said.
Bell told lawmakers he’s proud of the work department employees did to help Montanans with questions about the rebates.
While the state released all the income tax rebates at once, the second half of the property tax rebates will come out next year. Bell said Revenue leaders plan to look over the data from this year’s rebates and see what went well and what they can improve on in the application and outreach procedures.
“It’s important for us that as we go into next rebate season, we build our successes and then we work on the things that we need to work on,” he said.
BUTTE — It’s Halloween and Butte-Silver Bow set up a spook house for the kids at the County Courthouse. It’s also the day Butte’s chief executive sent out a letter on another scary issue: increased property taxes. Something he says falls on the shoulders of the governor’s office and the state legislature, but he’s trying to handle this scary issue locally.
“I’m not trying to pick a fight with the governor, but the governor has said that local governments are the cause of the property taxes going up and that’s simply not true,” said Butte Chief Executive J.P. Gallagher.
With home appraisals seeing an average increase of 35 percent, Gallagher said local governments can’t raise property taxes that high. He claims the state could have taken action to lower the tax rate and offset the property tax increase.
“The state could have taken that upon themselves to help property owners and they chose not to make that decrease,” said Gallagher.
A state legislator said lower tax rates would have shifted the tax burden to small businesses.
“The impact to small businesses would have been enormous. The next biggest impact would have been the ag producers. If we’re talking statewide averages, it would have wiped out commercial small businesses,” said Rep. Llew Jones (R-Conrad.)
Gallagher is cutting property tax revenue by cutting $3.5 million from Butte’s 2024 budget. Governor Greg Gianforte said he’s addressing rising property taxes by proposing up to $2,000 in property tax rebates for Montana homeowners, and delivered $120 million in permanent, long-term property tax relief over the next two years.
“There are solutions, but they are not simplistic solutions and you aren’t going to calculate them in a day,” said Jones.
Still, Gallagher puts the problem on the shoulders of the Legislature.
“Hopefully the Legislative Session will go back in a year and a half and correct the tax burden that they kept on the taxpayers,” Gallagher said.
But instead of reinstituting the old property tax protections that had worked for decades, Democrats have come up with a new plan: It’s called Proposition HH, and it would essentially repeal the state’s Taxpayer Bill of Rights spending limits, giving Democrats the ability to tax and spend to their hearts delight.
Passed in 1982, Colorado’s Taxpayer Bill of Rights set a limit on how high Colorado spending could rise each year based on the prior year’s spending limit, plus inflation, plus population growth. Under the state constitution, any tax revenue raised beyond this limit is automatically refunded to taxpayers each year. In 2022, for example, TABOR returned every taxpayer $750 in the form of a check from the government; joint filers received $1,500.
Using the drop in local tax revenue during the COVID shutdowns as an excuse, Democrats and their teachers union allies in 2020 pushed through a repeal of Colorado’s long-standing property tax protections, more commonly known in the state as the Gallagher Amendment. It is estimated the amendment saved Colorado property owners $35 billion since 1983.
With the Gallagher Amendment protections gone, however, Colorado homeowners have seen their tax bills skyrocket and they want change now. But the Democrats who control the governor’s mansion and the General Assembly are ideologically incapable of returning tax dollars to citizens.
Instead of reinstituting the Gallagher Amendment, which successfully protected property owners for decades, Democrats have placed a slickly worded proposition on the ballot that sounds like a tax cut, but is really a tax hike. Here is what the proposition says:
“Shall the state reduce property taxes for homes and businesses, including expanding property tax relief for seniors, and backfill counties, water districts, fire districts, ambulance and hospital districts, and other local governments and fund school districts by using a portion of the state surplus up to the proposition HH cap as defined in this measure.”
It is deliberately confusing and deceptive. When the proposition says “by using a portion of the state surplus,” what it means is that no Colorado taxpayer will ever see a tax refund check again. Proposition HH repeals Colorado’s Taxpayer Bill of Rights by turning what was a taxpayer refund into a slush fund for Democrats’ spending priorities.
This is why Proposition HH is being bankrolled by the Colorado Education Association and far-left dark money groups such as the Sixteen Thirty Fund.
Colorado has historically been one of the least taxed states, which is a big reason why it has enjoyed above-average economic and population growth. Proposition HH would change all that, dooming Colorado to slow economic growth and a California-like future.
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Property tax bills are going up — again — for several Utahns.
You might ask: Wait, aren’t state tax laws supposed to protect against this?
Yes, but they also allow local governments to propose a higher tax rate to generate more revenue to do things like pay for new buildings or increase employee salaries.
And surging real estate prices also are hitting people right in their property tax bill.
Want to know more? Let’s break it down.
Your property tax bill is most likely going up for at least one of these two reasons:
About 80 taxing entities across the state — from cities and towns to school districts and libraries — are seeking property tax rate hikes this year, so chances are pretty good that one or more of those increases will hit your wallet. Go online to see a table with proposed tax increases.
The valuation of your home could be increasing your bill. Because home values are increasing more than those of commercial properties, homeowners are footing a larger portion of revenue increases.
Utah’s truth-in-taxation law limits the revenue taxing jurisdictions like cities, counties, school districts and water districts can receive. Under the law, a jurisdiction can only receive the amount of revenue it collected the year before, plus taxes from new development.
Those constraints mean tax rates automatically adjust down to offset additional revenue when property values rise.
Alta Mayor Roger Bourke said before a public hearing on the town’s proposed property tax increase that the law means officials fall behind as expenses go up — unless they change the tax rate.
If a taxing jurisdiction wants to create more revenue to pay for new services or items, officials must hold a truth-in-taxation hearing like Alta, population 216, did earlier this month.
The town at the top of Little Cottonwood Canyon proposed and passed a tax rate of 0.001043. That’s 64.25% higher than the certified tax rate and will cost the average homeowner about $425 more a year.
Though Alta’s hearing drew no public comment, the meetings usually put governing bodies in the hot seat and mean officials must explain to the public why they want to raise property tax rates.
They usually attract opposition that prevents — or at least reduces — major tax increases.
Alpine School District’s board, for example, approved a 7.8% increase after frustrated residents packed the board room and said a big increase would mean stretching budgets even more.
That was lower than the double-digit increase initially proposed. It’s also lower than last year’s rate, said Rob Smith, the district’s business administrator — though property taxes could still go up depending on a home’s valuation.
Local governments, school districts, water districts and other taxing entities have lots of reasons for bumping up property tax rates.
Alta has specifically cited a $161,000 increase in staff wages to attract and retain employees with competitive salaries.
Bourke also pointed to saving for a new community center.
Pleasant Grove voted to increase property taxes by 14.8%. That’s $56.64 more a year ($4.72 a month) for an average homeowner.
City officials went back 30 years and couldn’t find the last time Pleasant Grove increased property taxes, City Councilman Eric Jensen said.
The increased revenue will help the city add a firefighter and a library employee, increase police wages and build a new park with amenities, including a splash pad and skate park.
Some residents supported the entirety of the increase, while others wanted to see the park — the largest beneficiary of the revenue hike — funded another way.
One resident said he’s in favor of contributing to the city’s efforts to improve quality of life “for a fee of less than half of a Netflix account.”
Another expressed a problem in general with taxes as a burden on those with fixed incomes.
“You get your home paid off, everything’s good, you retire, and your property taxes keep on going up,” he said.
City Councilwoman Dianna Anderson said her property tax bill will go up $63 and the increase is “something that’s very real for each one of us.”
The two largest increases in the state are coming from towns with a combined population of about 1,200.
Goshen, a town of about 980 located on U.S. Highway 6 about 8 miles west of Santaquin, passed a tax increase of 198.6% and intends to use the additional revenue to buy a new fire engine for structure fires.
Wallsburg, a town of about 300 near Deer Creek State Park in Wasatch County, proposed a tax increase of 185.5%.
The notice didn’t include information about plans for the additional revenue. But a document for the public hearing said the $33,000 in additional revenue will increase the budget for street maintenance and repair, maintenance and supplies for the town hall and cemetery and increase pay for public officials and administrative staff.
There are options for homeowners to appeal the valuation of their property.
But nothing in state law automatically caps how much homeowners have to pay when residential property values increase faster than commercial property or other types.
Homeowners have until Sept. 15 to file an appeal with their county’s board of equalization. That board can agree to lower a property value for homeowners who provide a compelling basis for their appeal.
You can start the appeal process by visiting the website for your county treasurer or assessor. There’s more information about how to file an appeal available on your valuation notice.
There are still options after a rejected appeal, but they require jumping through more hoops.
The Utah State Tax Commission has a few ways of seeing if counties got property valuations right or wrong. Cases that make it to the commission have a fairly good success rate.
Homeowners can start with an informal hearing, where they tell their story, the county tells its side and a judge decides. They also can waive the informal hearing and go straight to a formal hearing.
There’s also the option of mediation, where a judge helps the homeowner and the county agree on the right property value. People who can’t reach an agreement through mediation can get a new judge and go through a formal hearing.
For people who still don’t get their desired outcome, there’s another set of options.
Homeowners can take the record from their formal hearing and send it to the Utah Supreme Court for review. They also can file the case in state district court.
There are multiple options for homeowners who simply can’t afford to pay their property tax bill.
The “circuit breaker” tax relief program is available for homeowners with low incomes. Applications are due to counties by Sept. 1.
Homeowners also can ask their county for an abatement. That process asks elected county leaders to take up to $1,110 from a tax bill for the year and requires homeowners to file a TC-90CY form with the county.
Deferral is also an option for low-income Utahns who are 75 or older the year they apply for a new program. Under this route, taxes add up each year a person defers and come out of the eventual profit from a home sale. This program also requires homeowners to apply with the county by Sept. 1.