Property Tax Reform Must First Help Montanans

By Beacon Staff

One thing is for sure about the 2009 property tax reappraisal; Montanans want their property taxes regulated, mitigated and expect to be treated equally.

The free market approach to paying for required local services needs simple regulation and oversight. Folks across the political spectrum are saying that deregulation has not worked. Deregulation has been bad for electricity bills, insurance premiums and gas prices at the pump and it’s just as expensive on homeowners’ property taxes.

Farmlands and timberlands are taxed on the productive value of the land. Homes and businesses are taxed on the free market. The value of homes built in our communities will determine the market.

I asked for help with ideas on property tax solutions and the comments are genuine and informative. I expected the good folks from Whitefish, Columbia Falls and Kalispell to e-mail and call, as our areas are growing like the dickens. But the outpouring came from across Montana, small towns and big cities alike.

Some folks talk about taxing homes, like farmland, and on the productive value with a roll back provision when the land converts uses. Others want to preserve a good source of funding for schools and local services.

Montanans mostly talk about better defining and increasing the amount of exemption from the market value of their home and downtown business; of establishing residency requirements and decreasing tax rates while phasing in the market valuation over a longer time frame.

Interesting ideas are coming from what other areas are actually doing. Some states instituted a 2-to-4 percent cap on the growth of the market value of homes. Others re-appraise homes upon the resale of the property and base any new valuation on current market conditions. But without a proper growth rate, no doubt our kids would see the same red ink from deficient infrastructure as the state where the policies currently exist.

Montana offers caps on the growth of market values based upon household income, as well as credits off one’s income taxes based on age. Energy conservation credits for homes also exist. Sadly, most homeowners have not heard how easily these incentives apply. Folks who were aware explained of the need for broader appeal and expansion.

A sales-ration analysis during the reappraisal process would help determine the media valuations for given geographic areas. It helps assure that homes are not appraised higher than actual market conditions per area, as some homes are more recreational in nature, while others serve as primary residence.

Any approach to reform must first help Montanans. To assure that retired homeowners can actually afford to retire in their home and ensure school kids continue to prosper and emergency services remain active. To encourage folks who are out-of-state residents, lucky enough to own a home in beautiful Montana, to spend an extra month here and become a local and declare residency, register to vote and claim a homestead exemption in Montana.

From all the talk, residency appears to be an integral tool in the property tax debate. Non-residents appreciate our way of life, help fund public education but do not help shoulder the cost of fighting wildfires, fund mental health, higher education or provide funds for infrastructure or to keep our waters clean and our public land open.

Many non-residents are honorable and quite benevolent as exemplified in actions across Whitefish, with the recent spree of private-public partnerships projects which built theaters, community centers, ice rinks, skate parks, bike paths, and pools; other communities are not so lucky.

Regulatory tools, like caps on the growth of homeowner property taxes, increased exemptions and homestead declarations, are much-needed tools to mitigate the free market of property taxes and will help Montanans.

I’ll keep working with our Governor, any willing legislator and continue to ask for help from Montanans in coming up with solutions to the property tax reappraisals. Regardless, the outcome will no doubt still work toward market based solutions as they offer a concrete mean to secure equality.

Montana is lucky that both Democrats and Republicans on the state committee charged with property tax reappraisals are working toward solutions for the 2009 Legislature. If you hear of other good ideas on the subject, please send me an e-mail at mjopek@mt.gov

Mike Jopek, Whitefish, is a Democratic state representative

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