HELENA – The Montana Senate has endorsed a bill to soften the brunt of property tax reappraisals after Republicans fended off Democrats’ changes.
Since the session began, lawmakers have been considering ways to mitigate tax increases tied to increasing property values. Changes in property valuations vary widely both between and within counties, but the Department of Revenue estimates that on average property appraisals have increased by 55 percent since the last reappraisal.
House Bill 658, supported by the Senate on a 30-20 vote, relies on tools used previously to soften the impact of the reappraisal on homeowners: Higher tax rates would be phased down over the next six years and exemptions for the taxable value of property would be gradually increased.
The measure also requires the Revenue Dept. to study property sale prices every two years so that lawmakers will know if the tax system needs to be adjusted to reflect rapid market changes, such as a slump in home values brought on by the real estate crash.
“I think the taxpayers of Montana need to have assurance and they have that assurance in this bill,” said Sen. Jeff Essmann, the Republican chairman of the Senate Taxation Committee.
The bill approved by the Senate differs significantly from the House-approved version carried by Rep. Mike Jopek, D-Whitefish, who has said he opposes the changes. A final Senate vote Friday will send it to a conference committee, where lawmakers appointed by leaders from both chambers will iron out the differences.
Democrats offered two amendments during Thursday’s floor session that they said would allow more relief for low-income property owners. Both were defeated on nearly party-line votes.
One would have eliminated a new property tax exemption for roads and parks located in subdivisions. Sen. Kim Gillan, D-Billings, the amendment’s sponsor, said the new exemption might have the unintended consequence of giving gated communities and the owners of undeveloped subdivision land tax breaks.
The other amendment, sponsored by Sen. Christine Kaufmann, D-Helena, represented a complex effort to shift more aid to low-income property owners by changing how existing aid programs are structured.