Montana has a property tax problem.
In the 1980s California enacted Proposition 13, designed to give relief to folks who bought homes that invariably increased in value along with their property tax bill, causing some to have to sell and move. It seemed unfair, and so an initiative was passed that capped the bill at 1% of whatever was paid for the property. When re-sold, the 1% was on the new higher price, but stayed the same until then.
Montana now faces the same problem with the current surge of newcomers that are driving prices to rise at an astounding rate along with property tax bills. We who are on fixed incomes worry those increases will force us out. Currently there are some who propose a similar solution to California’s Prop 13 … and are asking us to sign a petition to get Constitutional Initiative 121 put on the ballot to force our Legislature to make reductions. It sounds great, but wait. There is an enormous elephant in the room. Property taxes fund schools. Schools are already dreadfully underfunded. Where will that money come from?
When I first moved to Montana 30 years ago from California, I was not used to getting a penny back from a $2.99 purchase. I liked it! No sales tax? Wahoo! But, when property tax income went down in California because of Prop.13, the state could raise the sales tax to pay for the budget shortfall. Of course, there were complaints, but it was accepted as a fair trade-off. Montana has no sales tax, but 45 out of the 50 states in this country do. Sales taxes are the fairest of all the many taxes we suffer. The more you have to spend, the more you pay! And if implemented in Montana, the hundreds of thousands of tourists who enjoy visiting our state would finally end up paying in part for the wear and tear to our infrastructures that we residents now foot the bills for. Enacting a small sales tax on everyone could make up for any property tax revenue shortfall.
As in California, the necessities would be exempt from any sales tax and would include groceries and medications along with a few others. Items like boats, cars, planes, furniture, etc. would not be. So the more you have to spend on those items the more you contribute to the state’s coffers to offset lowering property taxes for “resident homeowners.” You see, I propose lowering property taxes only for those who live in their full-time owner-occupied homes and owners of local businesses. No breaks for second or third vacation properties, absentee owners/investors or big corporations that want a branch in Montana. Some combo of a small sales tax for all and capping the amount of taxes for full-time homeowners makes sense and is fair.
CI-121 greatly benefits the wealthy and will cause shortfalls and cuts to our already underfunded public services. Don’t sign it. Surely we can come up with something that helps the ones that need it most, Montana’s full time residents.
Carol Blake lives in Eureka.