Democrat property tax bills

HELENA – As he introduced one of his party’s two primary property tax relief bills on Tuesday, Jan. 21, Rep. Jonathan Karlen, D-Missoula, warned a panel of legislators that residents are being priced out of their communities.

The House Taxation Committee heard testimony Tuesday on Karlen’s House Bill 154, which aims to make property tax more affordable to low-income taxpayers through a tax credit and on House Bill 155, which would add a tier structure to property tax. Two Republican-backed bills are up for a hearing in the same committee on Wednesday.

Property tax relief has been a main talking point for both parties as rates increase across the state. According to analysis from Montana Free Press, Montanans saw a 21% increase in median residential property taxes from 2022 to 2023, which added up to an additional $213 million in tax bills across the state.

Karlen’s bill proposes a credit calculated by income and property tax bills. Karlen said, for instance, for a taxpayer with a household income of $69,000 with a $4,000 tax bill, the tax credit would be about $1,100.

“ So what this allows us to do is say, your property tax might stay the same or it might go up, but we are going to make you whole through this tax credit,” Karlen said.

The credit would also apply to renters, compensating for potential rent increases tied to property tax hikes.

Allen Lloyd of the Montana Association of Certified Public Attorneys was the sole opponent of 154, continuing the Association’s streak of opposing all tax credit bills in hopes of limiting tax code confusion.

Rep. Mark Thane, D-Missoula, is sponsoring House Bill 155. The bill would make the first $200,000 of commercial properties and the first $50,000 of residential properties tax-exempt. The leftover value of residential properties would be taxed at a tiered rate, from 1-2%.

Nicole Rolf of the Montana Farm Bureau Federation opposed HB 155. She said the shift would disproportionately affect taxpayers who own agricultural properties.

“ So while they may have a small decrease in their home taxes, they’re going to turn around and most likely see an increase in their class three ag land property tax,” Rolf said.

Cary Hegreberg also opposed, representing the Montana Chamber of Commerce. He said there is not a large enough commercial tax base to warrant the change, and the popularity of working from home further decreases that need.

The House Taxation Committee will continue discussion on both bills, as well as the Republican-backed House Bills 231 and 213 before deciding on sending them to the full House for debate.

Clayton Murphy is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation. Murphy can be reached at clayton.murphy@umconnect.umt.edu.