Kalispell Lawmaker’s ‘Right Back Act’ Delivers Relief to Taxpayers, Steadies Public Education Funding Model

A Kalispell lawmaker’s signature property tax relief bill may not have received the same degree of attention in recent weeks as other high-profile tax reform measures, which both chambers of the Montana Legislature courted and reshaped right up until the session’s final hours on Wednesday. But even if House Bill 483 was something of a wallflower this session, its supporters say it may be remembered as the belle of the ball.

According to the bill’s sponsor, Rep. Courtenay Sprunger, R-Kalispell, that’s due in part to the immediate and long-term tax relief it delivers to Montanans, returning a projected $50–$60 million this fall. But it also attaches a much-needed stabilizing ballast to Montana’s 95 school equalization mills, a mainstay of Montana’s K-12 public education funding model that has grown increasingly lopsided in the past two decades — a gradual imbalance that skyrocketing property values all but capsized.

“Most relief looks like a big water balloon, where you’re pushing money around to find the right formula,” Sprunger said. “This policy doesn’t just focus on the immediate crisis, it provides relief today, tomorrow and 10 years into the future. It ensures we can stay in our homes and thrive.”

Dubbing her signature property tax relief measure the Right Back Act, Sprunger said she worked with a team of education funding experts to craft a measure that sends excess property tax dollars collected from the uniform 95 school equalization mills “right back” to Montanans. It piggybacks on legislation passed in 2023 as House Bill 587, which revised Montana’s model for balancing funding between school districts based on their taxable wealth, a system that created disparities.

While Sprunger said the Right Back Act builds on the foundation of House Bill 587, “this bill takes it further.”

“Refined by the lessons we’ve learned from the recent dramatic shifts in property values, its key objectives would reduce local property tax bills, using the growth in the 95 mills to deliver direct relief to taxpayers, and it does so starting this fall,” she said.

Sprunger said the Right Back Act pays down key permissive mills by delivering $25 million for school bus transportation, $7 million for county retirement funds and $18 million to offset guaranteed tax base (GTB) obligations, “reducing costs that appear on every Montanan’s property tax bill. It strengthens the role of the 95 mills to “ensure both stable school funding and access to a quality education for every child.”

It also modernizes state reimbursement rates for school transportation that have been stagnant for two decades, delivering immediate tax relief in 2026, while guarding against against tax spikes caused by reappraisal cycles, which lessens a long-standing lag associated with GTB.

“And last but not least the bill provides language that will allow this bill to coordinate with any other property tax relief legislation that this committee and others work together to pass,” Sprunger said. “Basically you can think of this bill as a cleanup batter.”

Lance Melton, executive director of the Montana School Boards Association, said HB 483 makes critical adjustments to the state’s share of transportation reimbursement rates, which, along with reimbursement rates to counties, have remained flat since 2005.

“In the meantime, district taxes have risen significantly, above $92 million,” Melton said.

Under the Right Back Act, the state would pay a more significant share of school transportation costs, with the county share remaining flat at $12 million and the school district’s share dropping by $24 million.

“So this is permanent tax relief right off the bat to solve a 20-year lag in inflation and right the ship,” Melton said, adding that it gives lawmakers greater control to adjust equalization rates when property values are reappraised, increasing their ability to mitigate impacts on property taxpayers.

While the previous session’s work directed excess collections from the 95 mills to offset local contributions to teacher retirement, it quickly drew opposition from county governments, including Flathead County, which sued the state in an effort to cap the collections at a time when property values were skyrocketing. The Montana Supreme Court ruled in the state’s favor in November 2023.

“The court found that there was an excessive reliance on local variable mills that are a patchwork quilt across the state,” Melton said.

The early threads of that patchwork quilt emerged in 1993, when the Montana Legislature passed the 95 mills for K-12 public school funding. Lawmakers launched the initiative to address a Supreme Court ruling that the state’s failure to adequately fund the education program on a uniform basis forced an “excessive reliance” upon local variable levies that differed inequitably from district to district. The court found that the inequities in tax rates caused the state to fail to provide a system of quality public education to each student.

The Legislature responded to the ruling by creating three new uniform levies to promote equalization — 33 mills for elementary equalization; 22 mills for high school equalization; and 40 mills for state equalization. Because the Legislature adopted the mills to be uniformly applicable to every property taxpayer in the state, these three separate levies became known in their combined form as the 95 mills for school equalization, which have been consistently imposed and used by the Legislature to fund Montana’s public schools for more than three decades.

Each school district in Montana currently sets the rate at which it taxes local property owners to fill its base budget — a complex calculation that is determined by the taxable value of the district, the number of taxpayers within it and the budgetary needs of the school district. Under the district-by-district system, hundreds of different school mill rates have proliferated in Montana, creating a tax structure that education experts say is “near impossible” to understand. While the formula favors small districts in tax-base wealthy areas, such as resort destinations and natural resource hubs, it leaves lower income areas shouldering a higher burden of local funding.

“We have mills that range from 1.78 in one community to 616 in another. On a per-pupil basis, the value of a mill is as low as $0.34 in Heart Butte and as high as $2,750 in Alzada,” Melton said. “So there are vast disparities in tax wealth in communities across the state and these 95 mills were originally put in place by the Legislature in 1993 in order to protect and preserve against an excessive reliance on variable local mills.”

As the first of the House’s major property tax relief proposals to reach the governor’s desk, one reason House Bill 483 received less attention than its counterpart measures, which established “homestead” property tax rates, lowering the tax burden on Montanans’ primary residences, long-term rentals and small commercial properties while raising them on those who don’t qualify — namely, second homes and short-term rentals — is that it passed both chambers with broad support, passing the Senate on a decisive 46-4 vote.

But it works in concert with the other measures to lessen the burden on local tax systems, Sprunger said.

As the name suggests, the bill sends excess property tax dollars collected from the uniform 95 School Equalization Mills “right back,” building on House Bill 587, which the Montana Legislature passed in 2023 to create the School Equalization and Property Tax Reduction (SEPTR) account.

“This is a property tax solution you can take home to your people and say ‘starting this fall we are doing something , we did hear you, we are going to make a difference, and we are going to do so without damaging our educational structure,” Sprunger told members of the Senate Taxation Committee on April 14.

Shelley Turner, executive director of the Montana Association of School Business Officials, said HB 483 shores up funding for county retirement systems by increasing statewide elementary and high school GTB ratios by 300% for Fiscal Year 2026 and 262% for 2027 and beyond.

“This aid is essential for counties with lower property tax values ensuring they can meet their retirement obligations without placing an undue burden on local taxpayers,” Turner said. “It represents a comprehensive approach to revising school funding laws in a manner that supports county retirement systems and provides significant savings for Montana taxpayers. By stabilizing school levies, providing property tax relief and assuring efficient use of funds this bill will maintain the financial health of our counties and protect the interests of taxpayers.”

Melton, who supported the bill on behalf of the Montana School Boards Association, the School Administrators of Montana and the Montana Association of School Business Officials, gave Sprunger plaudits for her “reference to taxpayers getting the money right back.”

“And I would even go further to suggest it prevents an over collection in the first place,” he said.

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