A Montana Property Tax Revolt is on the Way

I see that train a’coming, a’coming down the tracks
It’s building up a head of steam and it ain’t turning back

It’s fair to say Montanans who own homes and businesses are in mass shock having just received the new reappraisals on their homes, businesses, and property. For many, if not most, the new valuations nearly doubled — and that’s got people worried they may not be able to pay the subsequent taxes based on those theoretical “values.” If the past is any indication of what’s ahead, there’s another Montana property tax revolt on the way.

Those with good memories will recall when a citizen property tax initiative, I-105, was on the ballot in 1986. The question facing voters was straightforward, saying “taxes levied on property classes 3, 4, 6, 9, 12 and 14 could not exceed the amounts levied on those classes of property for the taxable year 1986.” In other words, it was a freeze on property taxes at the 1986 level.

Despite hard-fought opposition by local governments, public employees unions, and their allies who claimed the measure would lead to the collapse of government services, schools, and government supplied amenities, voters simply said “enough is enough” and passed the measure with a solid majority of 54.9% supporting to 45.09% in opposition.

The 1987 Legislature didn’t outright repeal I-105, but it did pass a series of bills to basically gut the property tax freeze. As noted in one analysis: “These limits were eroded by a number of provisions enacted in 1987 and later. First the 1987 Legislature specifically excluded from the caps annexation, new construction, rural improvement districts, special improvement districts, debt service, street maintenance districts, tax increment financing districts and jurisdictions in which taxable value declined by 5 percent or more. The limitations of I-105 were further eased by the 1989 Legislature with the adoption of the ‘sales-assessment.’” The result? “The combined mill levy of state and local governments and schools increased steadily. By 1994 the average mill levy had increased 50 percent over its 1987 level.”

Already, proponents seeking to limit property taxes are before the Supreme Court arguing Attorney General Knudsen does not have authority to decide the “sufficiency” of a ballot initiative. As Matthew Monforton, a former Republican legislator who is bringing the challenge, told reporters: “the attorney general does not have authority to make a declaration regarding the constitutionality of ballot issues” and the move was “a deliberate attempt by Republicans to suppress the rights of Montanans to circulate a petition.” He concluded saying: “The claim of the governor and Republicans desiring property tax reform is a sham.”

While Montana’s property tax system can leave most people confused, what they won’t be confused by is the shocking reappraisal for their homes and business property that basically doubled — although their incomes certainly didn’t double from last year. For those on fixed Social Security income, the looming tax increases are especially daunting when added to the already high cost of basic necessities such as food, utilities, rent and medical expenses.

It seems unavoidable that Montana’s next property tax revolt is on the way thanks to the new, sky-high “valuation” just placed on their homes and property. Although not a cent of that “value” is actually received until they sell their homes, most Montanans know they have little choice — you either pay your taxes or the government takes your home and business.

Assuredly it will be a hard-fought issue. But given the already high property taxes for most Montanans and our low per capita incomes, supporting a measure to limit those looming tax increases will seem an even easier vote to cast now than it was in 1986.

George Ochenski is a columnist for the Daily Montanan, where this essay originally appeared.