(C) Daily Montanan This story was originally published by Daily Montanan and is unaltered. . . . . . . . . . . Legislative Democrats unveil Montana property tax proposals for 2025 • Daily Montanan [1] ['Blair Miller', 'Keila Szpaller', 'Greg Larose', 'Jared Strong', 'More From Author', '- July', '.Wp-Block-Co-Authors-Plus-Coauthors.Is-Layout-Flow', 'Class', 'Wp-Block-Co-Authors-Plus', 'Display Inline'] Date: 2024-07-02 Democrats in the Montana Legislature unveiled a property tax plan Tuesday they will bring forward on the first day of next year’s legislative session they say would reduce tax payments for most homes valued under $750,000, create new tax tiers based on a property’s value and reverse a tax burden shift to Montana homeowners. Senate Minority Leader Pat Flowers, D-Belgrade, and Rep. Jonathan Karlen, D-Missoula, unveiled the three-tiered plan Tuesday at the State Capitol. They again placed blame for the rise in property values and assessed taxes at the feet of the Republican supermajority and Gianforte administration for not changing assessment rates last year after the Department of Revenue warned property values would likely go up by more than 40%, and for utilizing one-time-only rebates to alleviate the burden. “Let’s be clear: This crisis is one entirely of the governor’s and Republican Legislature’s own making. They knew it was coming; they knew how to prevent it, and they did nothing,” Flowers said. “Worse, they deepened the crisis by giving tax breaks to major corporations and left the rest of us, including our Main Street business, picking up the bill.” The Democrats released details of several bills they plan to have drafted for 2025 as Republican Gov. Greg Gianforte’s Property Tax Task Force continues readying its proposal to the governor about how to change tax structures and mill levies to try and reduce costs for homeowners, and as interim legislative committees continue to finalize bill proposals for next session. The task force is set to meet as a whole body again next Monday. Few ideas from Democrats, currently a superminority in both chambers, have garnered any traction so far in the interim committees, which also have a Republican supermajority structure following changes last session. “If (the task force has) got, you know, another idea that we can complement what we’re doing, or that gets to the same end, we’re all ears,” Flowers said. “But today, we have not heard that, and we think it’s important to get a proposal on the table that we know is going to create a fairer tax system and give working Montanans a break.” Flowers and Karlen said they would have several other bill drafts moving forward on the topic, but they outlined three primary proposals that they said would work in concert but would also be beneficial if only one or some of them pass. The first would create a homestead exemption that would keep the first $50,000 of a home’s value from being taxed, as well as the first $200,000 of a class 4 commercial property, which includes small businesses and some commercial and industrial property. The second proposal would change residential property tax rates to a six-tiered structure by which a primary residential property owner would be taxed more as the value rises. Homes worth between $50,000 and $500,000 would be taxed at 1%, and rates would rise from there based on four higher tiers. The Tier 6 tax rate for homes valued over $1.5 million would be 1.89%. Currently, residential homes are taxed at 1.35% up to $1.5 million, when it moves up to 1.89%. The third proposal would implement what the Democrats call a “housing fairness” tax credit to offset costs of rising property taxes for retired Montanans, renters, and lower and middle-income homeowners. The idea piggybacks off a bill Karlen introduced in 2023 and would have given a tax credit to homeowners making under $130,000 a year to offset property tax costs. Karlen’s bill was killed by Republicans on the House floor. Karlen said for those that qualify, the tax credit would go up proportionally to their property tax bill and said it would be a “backstop to make sure that nobody falls through the cracks.” Flowers and Karlen said the plan would lead to an estimated $214 million reduction in the amount of residential property taxes paid, a 15% reduction in the amount of taxes paid by a home worth the median value statewide, and a $14 million reduction in commercial taxes paid. They said the proposals would also result in a $100 million reversal of the corporate tax shift, resulting in $90 million less coming back to the state coffers when considering all the changes. Flowers said the Democrats believe even with less revenue coming back to the state, counties and schools should see the same amount of money coming in. He said with a $700 to $800 million forecasted budget surplus, the package should be “one of the highest priorities” for lawmakers and the executive branch. Flowers and Karlen said by increasing tax rates for higher-value homes, that money should offset some of the money the General Fund would lose by reducing rates for lower-priced homes, and that Democrats also hope to introduce companion bills that look at commercial property exemptions and loopholes that could offset the lost revenues. “Most business that are here have seen, we think, inappropriate exemptions and loopholes. And because of those, the burden’s fallen on residential property owners because, in essence, it’s a zero-sum game,” Flowers said. “And if the residential property taxes go up, industrial and commercial has gone down, and that’s what happened. And we want to write the ship a bit on that.” Flowers said the Democrats do see their proposals as a long-term fix that will have to be tweaked over time as Montana’s economy and sources of revenue change. Asked about how the business industry might respond to having more taxes shifted back onto them and their powerful lobbying representatives, Flowers said businesses would also get the commercial property exemption and have been trying to find ways to make it easier to hire employees to live in places with high costs of living. Most lawmakers so far this interim have been opposed to the long-floated idea of implementing a sales tax in Montana to add another revenue source for the state and stop shifting the burden back and forth between homeowners and business owners. “The only way that you’re going to have employees to run their business is if you also address affordable housing. Part of affordable housing is property tax,” Flowers said. “And so, we would hope that they’d see the value of this for the business community as well.” The Montana Department of Revenue and Gov. Gianforte sent out fliers that arrived in homeowners’ mailboxes this week reminding them they are again eligible for up to $675 in property tax relief if they apply by Aug. 15. Homeowners could also receive the rebate last year. Sean Southard, a spokesperson for the Governor’s Office, said Democrats were “grandstanding with press conferences and Twitter videos,” referring to Tuesday’s news conference and social media videos made by Democratic gubernatorial candidate Ryan Busse, but “Gianforte is delivering solutions to the problems facing hardworking Montanans.” “The governor is encouraged by the progress of the bipartisan property tax task force he launched, particularly the discussions about capping the growth of local spending which drives property tax increases and providing a homestead exemption to Montana residents to ensure out-of-staters, who own second homes in Montana, pay their fair share for our law enforcement, schools, and roads and bridges.” [END] --- [1] Url: https://dailymontanan.com/2024/07/02/legislative-democrats-unveil-montana-property-tax-proposals-for-2025/ Published and (C) by Daily Montanan Content appears here under this condition or license: Creative Commons CC BY-NC-ND 4.0. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/montanan/