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Constitutional Initiative 121 is a game – Daily Montanan

['More From Author', 'February', 'Paul Cartwright']

Date: 2022-02-28 00:00:00

A constitutional initiative has been proposed, Constitutional Initiative 121. Troy Downing, State Auditor, and Matthew Monforton, former legislator, say their initiative will lower property taxes on houses owned by long-term residents. They do say that.

If you were designing an initiative to undercut local control, eliminate services, and give the governor more power, you might come up with something like CI-121. Oh, and if you want to mess over homebuyers, especially young people, this initiative works for that, too.

Property taxes could use some improvement, no question. The Legislature has given so many special deals and exemptions that taxes had to rise on the rest of us. (If you can afford lobbyists and lawyers, this may not apply to you.)

Troy and Matt could have proposed something straightforward, like rebalancing taxes so everybody pays a fair share, or even giving a partial exemption to whomever they think is worthy. Instead, they offer an initiative that you might mistake for a game of Three Card Monty, a shell game, a confidence trick.

The initiative involves setting arbitrary caps, ignoring market values, pretending only houses suffer inflation, and other good stuff.

It starts by shifting taxes from residential property to everything else. Call it step one.

Businesses would immediately see their taxes go up. That’s because of existing law, which this initiative doesn’t change. Since renters tend to live in commercial properties, they likewise would get hit.

Troy and Matt claim they’re only talking residential taxes. True enough. But insiders like them know how the game is played. Once the initiative is in place, a legislative fight will follow to see who gets stuck with what.

For a bunch of reasons, the cap will expand to commercial and then undoubtedly to everything else. Arbitrarily, almost automatically, the question will be how to fit the cap on every class.

What won’t get discussed is what taxes are used for. Property taxes mostly go to local government: counties, cities, schools and special districts. These are who employ sheriffs, school teachers, firemen, mosquito sprayers, those sorts of folk. Fewer taxes mean fewer people doing those jobs.

To make matters worse, Troy and Matt forgot that inflation affects government costs just like it affects housing costs. The way the initiative is set up, inflation will lead to quicker, deeper cuts in local services across the board.

That’s the second step. Some people want that, I know. But even they might not like the third step in this game.

Your house sits in a bunch of tax districts — county and school district for sure, maybe city, maybe rural fire department, you get the picture. Troy and Matt don’t say what happens when the sum of the tax levies is greater than allowed by the cap. Which taxes and which services get cut back?

None of these authorities has any authority over the others. That means the Legislature, not you and your neighbors, would have to step in and decide what gets cut and what doesn’t get cut in your town.

Making all the calculations will be an administrative nightmare. We can expect legislators to bounce the decisions to the Department of Revenue. That’s who already does a lot of the property tax work, so why not have them do everything?

Which means that the governor, who controls all state agencies, will oversee what local governments get to do. Not to be overly anxious, but how many cops Helena has could well depend on what the governor thinks of us.

That’s not all. Whatever the initiative does to taxes overall, Troy and Matt’s initiative truly does apply only to current homeowners. If you buy a new house, you lose your tax break. If your kids want to buy a new house, they’ll pay way more for local services than you, saddled with costs you’ve ditched.

Look, property taxes mostly go to cops and kids. Schools, police, jails, courts, this is where the biggest chunk of property taxes is spent. I wouldn’t have picked Troy or Matt for “defund-the-police” types, but they could end up being more effective than anybody yelling in the streets.

Troy and Matt say they’re protecting older Montanans. But really they’re punishing the future. All of us will lose basic services. People trying to get a better home, a better life, and young people wanting to stay in Montana, they’ll pay the most.

Paul Cartwright is a former Helena city commissioner. He’s also an old guy who has owned his house a long time.

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