More You Should Know About Property Tax Appraisals

Perhaps a future Legislature will offer up property tax assistance that positively impacts younger homeowners and renters and helps preserve middle class home ownership

By Dave Fern

Sen. Greg Hertz, R-Poson, is one of the smartest guys on tax policy in the Legislature. I ‘m honored to serve with him and I often agree with him on different facets of tax policy. Occasionally our opinions veer to juxtaposed conclusions. In a recent guest column concerning residential property tax appraisals, the senator implies that the bane of property tax woes is the amount of mills levied within a taxing entity, with the inference that excess mills occur because of frivolous requests and the subsequent passage of such requests. The mills are a result of allowable budgets for schools, city and county government with an assortment of permissive non-voted and voted levies. Often times, a voted levy represents a need rather than a luxury. For example, your jail is bursting at the seams, your school enrollment has grown beyond the capacity of a building or in a vote of desperation, your county funds part of the operations budget of a nursing home. Many Montana communities do not have outstanding school building bonds, or open space bonds. An entity’s ability to pass a voted levy is by no means a forgone conclusion of passage. Residential property taxes may be unaffordable despite a discerning voter. 

This year’s Legislature increased the Property Tax Assistance Program (PTAP), discounting property taxes for eligible lower income levels. Most of the funding for this bill is derived locally with a tax shift to pay for the discounts. At the state level, the Elderly Homeowner and Rental Assistance Program offers assistance to older eligible residences, a fully state funded program. The Legislature also passed HB 587, a $32 million expenditure that reduced some of the school taxes paid by residential property to equalize funding . 

The most significant tax cut however was in the form of .6% reduction in state income taxes at a cost of about $150 million. Touted as making Montana more business friendly, perhaps the equivalence of such an expenditure directed for middle class property tax assistance would have been welcomed by businesses and the better thing to do. 

I appreciate the passage of SB 332m which will require local governments to inform the voters of the impact of budget increases. It is essential the voter be an informed consumer and make wise and affordable decisions. Lacking a general sales tax to mitigate property taxes, or the unlikely constitutional change required to freeze appraisals for existing homeowners, perhaps a future Legislature in partnership with the governor’s office will offer up property tax assistance that positively impacts younger homeowners and renters and helps preserve middle class home ownership.  

Rep. Dave Fern

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