HELENA – Republican lawmakers say they suspect the state is charging higher business property taxes than the Legislature intended — a problem they blame on incorrect estimates from the state Department of Revenue.
But the governor counters that it’s the lawmakers who are at fault because they rushed through an inadequate property tax plan.
The issue arises from the recent property tax reappraisal process and the legislation passed earlier this year intended to mitigate the expected increases in property values.
Senate President Bob Story, R-Park City, said Tuesday that small businesses’ property appraisal values are almost a third higher than the Department of Revenue estimated back when lawmakers decided the issue. He said lawmakers are still trying to find out how much of an effect this will have on property taxes.
“How many dollars are we talking about? Is this going to be excess revenue to the state? Right now, we are in the information-gathering stage,” Story said.
The Republicans blamed the problem on the state Department of Revenue, run by a Schweitzer appointee, for giving faulty estimates earlier this year.
Story said a special session of the Legislature may be needed to fix it — a remedy that would need the support of the Democrats in control of the House and Gov. Brian Schweitzer, also a Democrat.
Schweitzer was cool to the idea.
He said lawmakers were warned but failed to put adequate protections in legislation aimed at mitigating increases. The governor said he did not sign the bill because he preferred other options crafted by Democrats. But it became law anyway because he didn’t veto it, either.
Schweitzer said the Democrats’ plan would have protected more people from taxes jumping due to increasing property values.
“That they got it wrong is unfortunate. They were warned, and they passed a bill that did not work,” Schweitzer said. “I can tell you there is little stomach among the taxpayers of Montana to bring back the gang that can’t shoot straight.”
Schweitzer said the Revenue Department is still evaluating the issue and does not yet have a final calculation on the potential tax increases at stake.
“People who have unfairly had their taxes raised, of course they can protest it. That will work for some,” Schweitzer said. “For others, they should look to find a legislature that is more competent than this last one, and they can fix it in the next legislative session.”
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