HELENA – What is supposed to be a compromise bill to cushion how surging property values impact homeowners’ taxes has painfully lurched out of committee on the second-to-last day of the legislative session.
House Bill 658 has been stuck in a conference committee charged with ironing out differences between House and Senate versions of the bill.
Unable to reach an agreement again Monday, lawmakers on the panel sent what is essentially the Senate version of the measure back to the full Legislature on a 5-2 vote.
While all three senators voted for the bill, two of four House representatives on the committee voted against it, arguing that more should be done to protect the neediest from tax increases.
“I came to the Legislature after having knocked on doors during the campaign knowing that there was a very vulnerable population out there and I don’t think this addresses their needs,” said Rep. Dick Barrett, D-Missoula, during the committee’s final meeting.
Since it did not find support from a majority of the committee’s House members, the measure moves forward without a House recommendation.
Tomorrow it will face votes in both chambers, before it may move to the governor for consideration.
Speaker Bob Bergren said he thinks he can rally enough votes to push the bill through the House.
“I think that this is a good faith effort and that there is a fairness principle (at work),” said Sen. Kim Gillan, D-Billings, who broke with the panel’s other Democrats to support the measure.
Under the measure, about half of Montanans would see a decrease in their residential taxes and about half would see an increase, according to the Revenue Dept. But increases for the vast majority — 95 percent — would fall under $400 for the whole six-year period before the next reappraisal in 2015.
Changes in property valuations vary widely both between and within counties, but the Department of Revenue estimates that, on average, property value appraisals have increased by 55 percent since the last reappraisal.
Lawmakers have struggled to agree on the best way to protect the most homeowners from these increases, despite looming deadlines.
The latest fights have focused on the amount of money that should be pumped into tax assistance programs for the poor, elderly and disabled.
The version of the bill that will go to both chambers Tuesday removes an increase of $60 million in funding for those tax assistance programs over the next six years. It also reduces the state’s overall mitigation effort by about $12 million from the House’s version.
HB 658 relies on tools used previously to soften the impact of reappraisal on homeowners: Higher tax rates would be phased down over the next six years and exemptions for the taxable value of property would be gradually increased.
The measure also requires the Revenue Department to study property sale prices every two years so that lawmakers will know if the tax system needs to be adjusted to reflect rapid market changes, such as a slump in home values brought on by the real estate crash.