Central to Public Education

By Beacon Staff

Well over $1 billion is annually generated in statewide property taxes, the vast bulk from homeowners and small business owners.

Property that is physically connected by crossing a county or state boundary and property that is functionally operated as a single entity, but may not have a physical connection, is centrally assessed.

One hundred-and-thirty corporations are centrally assessed in Montana. National corporations pay statewide property taxes for local services like public education, police enforcement and fire protection.

Last year Montana enjoyed nearly $2 billion in market valuation from the nine railroad companies operating in the state. A dozen electrical and utility generation companies held over $4 billion of market value. Twenty-nine telecommunications corporations added just over $1 billion in market value.

Centrally assessed property amounts to under $10 billion in market value and contributes fewer than 20 percent of the statewide property taxes.

Compare that to the $75 billion in market value that Montana’s 350,000 homeowners amassed and it is easier to visualize who pays the vast bulk of statewide property taxes in Montana.

Forty-five thousand small businesses account for over $18 billion in market valuation while agriculture adds over $5 billion in value.

Homeowners and local business owners pay nearly two-thirds of all statewide property taxes.

Whitefish’s 2013 budget projections came in lower than anticipated. The city had estimated that growth would increase by over 4 percent. Department of Revenue assessors reported in valley newspapers that total tax base increases were only 2 percent.

The city indicated that the budget shortfalls were likely due to centrally assessed properties. And homeowner and local business properties grew by over 4 percent.

Montana legislators are oddly contemplating plans to further increase the homeowner contribution of statewide taxes.

Democratic Gov. Brian Schweitzer, who maintained huge budget surpluses during his eight years, has actively warned Montanans of a new phase of deregulation-like tax policy when the Legislature convenes in January.

Schweitzer told the Billings Chamber of Commerce that corporations, whose Montana property is centrally assessed, are floating property tax cuts of $100 million per year or a hefty 50 percent reduction.

Big business’ property taxes – that fund local services like public education – could be cut by $100 million and will create significant property tax shifts onto homeowner and small businesses.

Initial impacts indicate tax shifts in a moderate Whitefish, Columbia Falls, or Kalispell home reaching hundreds of dollars in annual increases. Downtown merchants and banks, or hardware stores in the Flathead Valley, may well see thousands of dollars of increases.

If Republicans control the 2013 Montana Legislature Sen. Bruce Tutvedt, R-Kalispell, stated that he is confident the GOP will cut property taxes for big industry. He acknowledged a tax shift onto homeowners and downtown businesses to pay for public education.

“We’ve got to take the political hit of the tax shift,” Tutvedt said. “If you’re going to be fair, then you shouldn’t get hit.”

The Kalispell Chamber of Commerce sent a letter to Tutvedt’s interim tax committee writing in part “Remember, the Legislature defines tax policy!”

Flathead taxpayers will attest that there is little fair about Montana homeowners and small business owners paying big industries’ share of property taxes. The Flathead already contributes more than its fair share.

As the Tea Partiers of the Montana Legislature advocate for lower taxes it is ever clearer that this new-brand of GOP caters policy onto big industry while shifting the central cost of public education, police and fire protection onto locals.

Voters should avoid any emergence of tax shifts by sending dependable, hardworking and well-known locals to Helena. Then and only maybe, the Legislature will finally reform property taxes for people living in their homes and the small businesses that provide the engine for our local economy.