Signature Gathering Can Continue on Property Tax Initiative

The constitutional initiative seeks to cap residential property taxes at 1% of the assessed value and limit annual changes in valuations

By Associated Press
The Montana State Capitol building in Helena. Beacon file photo

HELENA – A new law that requires Montana’s attorney general to warn voters if a proposed ballot initiative would hurt businesses does not apply to ballot measures that would amend the state constitution, a state judge has ruled.

Wednesday’s decision by District Court Judge Chris Abbott of Helena allows signature gathering to continue for a constitutional initiative that seeks to cap residential property taxes at 1% of the assessed value and limit annual changes in valuations, thus limiting changes in residential property taxes.

Market value assessments would be performed when property is sold or significantly improved, under the proposed initiative.

The Montana Federation of Public Employees, the Montana Farmers Union, realtor Jeff Barber, farmer Ron Ostberg and rancher Dennis McDonald argued in a complaint filed in January that Secretary of State Christi Jacobsen and Attorney General Austin Knudsen did not meet the requirements of the new law before allowing signatures to be gathered to put Constitutional Initiative 121 on the November 2022 ballot.

A law passed by the 2021 Legislature requires the attorney general to review ballot initiatives to see if they would impact any businesses and also requires the secretary of state to forward such initiatives to the Legislative Services Division for an interim legislative committee to consider the proposal and offer its opinion.

The state argued, and Abbott agreed, that the new law applies only to initiatives that seek to change the law, not initiatives that seek to change the state constitution.

The plaintiffs oppose the ballot initiative because putting a limit on residential property taxes could shift the tax burden to agricultural land and other property and lead to reductions in state services.

The Legislature’s Revenue Interim Committee voted unanimously last week to oppose the constitutional initiative, which is modeled after one passed in California in 1978 that allows people who hold onto homes longer to pay taxes on far less than the market value of the property. Supporters argue the proposal would prevent people on a fixed income from being taxed out of their homes.

Former state lawmaker Matthew Monforton and current State Auditor Troy Downing proposed CI-121. Supporters have until June 17 to collect the more than 60,000 signatures needed to put the issue to the voters in November.

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