Based upon property tax appraisal notices, it’s fair to say that the boom years are back. We see the construction happening all around Montana’s valleys in growing counties like Flathead, Missoula and Gallatin.
No one should be too surprised that fast growth means higher taxes. The formula is simple and market based. Yet taxes were already too high for homeowners and downtown businesses.
Places in Montana that again experienced fast growth will again see fast property valuation increases and again higher property taxes.
A few years back, the Montana Legislature changed the state appraisal process from a six-year to a two-year cycle. The common political argument was that it would make it simpler for property owners to understand taxation.
Earlier this year, the Legislature largely ignored the appraisal issue to let property owners deal with the process themselves.
The current two-year appraisal cycle covers this year and next year. In the Flathead, homeowners on average will see appraisals go up a reported 11 percent and commercial property assessments 9 percent.
That’s less than half of what average property owners saw back in the last six-year boom cycle leading up to 2009, when 26,000 Montana property owners protested their taxes. Then, Flathead property owners saw their residential property on average appraise for 73 percent higher over six years.
The problem with averages is their inability to appreciate how some recreational property is simply a home where people live and not a statistical outlier in a math formula. And people buy a slice of Montana for our way of life and recreation opportunities. They may or may not live here.
It’s fair to assume that properties in highly desirable locations will see significantly higher valuations. It’s not rocket science: Anyone looking at real estate sale prices throughout the valley could have guessed that tax increases would follow suit.
A decade ago, while serving in the Legislature, I loudly argued that old-timers, the generation that built our infrastructure and laid the building blocks to our towns, could not afford increased taxes given their fixed-income retirements.
These old-timers aren’t land speculators. They bought a piece of Montana a long-long time ago. Their intention was not to sell their home for profit, to flip the property for money. Homes were where people lived and raised families.
Property taxes have long been too high, never seeming to reduce. Taxes are not a partisan issue. Tax burdens face all growth-area Montanans. Some are fortunate to be able to pay them more easily than others.
Sure, there are some targeted tax breaks that select individuals can seek. The forms are readily available. The process of challenging appraisals is likewise open, easy and transparent.
State politicians routinely retort that local taxing jurisdictions don’t have to levy as many mills given higher appraisal. Mills are equally levied across a jurisdiction. It’s a leveling kind of math. Mills don’t target properties, not like appraisals due to growth.
The Montana Constitution requires property equalization. The process is applied fairly and equally from what I witnessed a decade ago from the inside of Helena.
Yet fairness and equality don’t pay the property tax bills, and local governments know firsthand the budgetary power of fast growth. Expensive things like local roads, drinking water infrastructure, police and ambulance services are all built to maximum tourism visitation.
The millions of economy-driving tourists who visit places like the Flathead Valley each year impact our way of life and our pocketbooks. The people who live in their homes in fast-growing Flathead County deserve property tax solutions, not more legislative silence and intransigence.
Last May the Montana Legislature chose state and local tax policy as its number one interim study priority. People who live in their growth-area homes and collectively pay the bulk of statewide property taxes should top the list of any tax policy.