The years 2002 to 2008 were great times in the real estate market. Construction was up; homes sold and were worth record highs. Not true today as the worldwide market collapse hit the real estate industry hard. This is bad news for homeowners and local businesses when it comes to property taxes, as the slump puts our market values far below their assessed value.
Pundits will tell us that reappraisal and property tax hikes are a result of Eastern Montana versus Western Montana. But when we look at the vote tally on the final mitigation bill requested by the Joint Senate Committee on Reappraisal we see a starkly different story.
I know the story all too well as I carried this bill for the Senate Committee, but in the end, voted against it. My repeated warnings of the consequences for homeowners and small businesses, particularly in growth regions, were ignored. So, I voted against a bill with my name on it. I also carried many tax bills to cap the growth of homeowner taxes, all of which were killed.
Every Senate Republican, except one, voted for this bad law. Nearly 90 percent of House Republicans joined the fray. Compare that with 75 percent of House Democrats joining me in voting no and nearly 50 percent of Senate Democrats voting no.
Republicans ignored our warnings that the haphazard strategy would not work for heritage homeowners and particularly the elderly. Special interest lobbyists wrongly said it would work and the Republicans believed them. Now, we’ll all pay an average 15 percent more in property taxes next month – some much more.
I came home from Helena last spring knowing the bill with my name on it was a colossal failure. The Republicans did not listen to anyone but the lobbyists, even as the fiscal note was clear: The bill would increase taxes dramatically for many.
The Republican Senate hijacked the House version of the final mitigation bill and exempted only 85 percent of the effect of growth. The Senate amended the House bill, which mitigated 100 percent of reappraisal, and forced homeowners and downtown businesses to pay $6 million more in taxes over the biennium and another $6 million over the cycle.
Senate Republicans removed all the assistance to the elderly, disabled, and poor homeowners and renters. Then Senate Republicans added a new tax on homes worth more than $1.5 million. No wonder elderly and lakeshore homeowners are hopping mad.
As a result, 60 percent of Montana homeowners will see their property taxes increase up to $200 over last year, some much higher. This is bad news during our difficult economic times.
Republicans legislators have the majority in numbers, 77 seats of 150, to call a special session of the Legislature to fix their mess.
The solutions were all presented in the 2009 Session: capping a homeowner’s tax growth to no more than 3 percent, extending reappraisal to guarantee no more than 5 percent tax growth for businesses and homeowners, lowering rates for those who live in their homes and pay more than $100 in increased taxes, and expanding assistance to elderly, poor and disabled homeowners and renters.
Over the years, the Montana Association of Realtors opposed our attempts to cap homeowner’s taxes to inflationary growth, or reappraise only upon the sale of a home. A sales assessment ration will look at how valuations have changed and be presented to the 2011 Legislature, not nearly in time for the taxman.
Those who joined me locally in voting against this bad bill deserve sincere thanks: Sen. Brueggeman, R-Polson; Rep. Beck, R-Whitefish; Rep. Sonju R-Kalispell; Rep. Brown, R-Columbia Falls; and Rep. Steenson, D-Kalispell.
I wish more Republicans had listened to homeowners and local businesses, and voted to help older citizens in high growth areas. The people who laid the foundations for our great communities deserve to be able to live out their days in their homes, and not to be sent to the “poor house” because suddenly their homes are worth more money than some made in their entire lives.
Citizen politicians would do much better by listening to homeowners and local businesses rather than well-funded special interest groups intent on preserving their own interest. And homeowners and small businesses should protect their wallets from a Legislature intent on listening solely to special interests.
Mike Jopek is a Democratic representative from Whitefish.