Property Tax Quake in Helena

Photograph Source: Tracey Elizabeth – CC BY 2.0

Not since the 1935 earthquake has Helena, the home of state and federal government in Montana, been shaken quite this way.

Every school levy on last Tuesday’s ballot was soundly rejected by voters.  Why?

Not because they don’t support education — but because our insanely high property taxes have left homeowners tapped out.

Of course this was totally predictable when the flush of wealthy in-migrants, speculators, and “vacation home” investment firms drove home prices — and property taxes based on those values — into the stratosphere.  Doesn’t matter if you’re living in the same home you’ve been in for decades, when someone down the street buys a house in your neighborhood for half a million bucks or more, your home is suddenly deemed to be worth the same amount.  And you get taxed on that theoretical value, even if you have no intention of selling.

But here’s the rub — even though the supposed value of your home doubled, it’s a good bet your income did not.  For seniors on fixed incomes, the pitifully small increases in Social Security for the COLA (cost of living adjustment) is vastly disproportionate their actual tax burden.  And in cities across Montana, those taxes doubled, just like the home values.

You’d be hard pressed to find someone in Helena who can recall when a school levy failed.

But Helena as not an aberration.  While some new levies passed in some places, they were the exception, not the rule.  That those who brought the levies seemed oblivious to the existing tax burdens piled on homeowners, and the statewide furor over property tax increases is inexplicable. Did they really think people would simply ignore the size of the proposed increases to be piled on top of the existing tax burden?

Certainly any number of specious methods were employed to make the actual costs seem less than they were.  The best examples were the estimates of the tax increases based on the $100,000 home, which doesn’t exist.

Consider these shocking numbers which are real, unlike the mythical $100,000 home.  The price for a single-family home in Bozeman is an astronomical $948,000!  In Whitefish, it’s a whopping $1,072,000.  Missoula’s median home price is $549,713 when in 2016 it was $263,512.  No need to go on, the trends and facts are clear enough.

Yet, when the levies were proposed, the additional cost was seldom presented to taxpayers based on those prices.  Nor was the aggregate cost had all the various levies passed…that was left up to the homeowner to figure out.

What’s even more astounding is that these same local governments are proposing even more bonds, levies, and taxes for the June election.  They seem oblivious to the fact that you can’t squeeze blood out of a rock — and the reality is that Montana homeowners are squeezed dry already.

While the defeat of so many levies in so many areas across the state is shocking to those who claimed “they should have been slam dunks,” what the results of the elections really portend is a larger property tax revolt on the horizon.

The old “tax-and-spend” label the Republicans tagged Democrats with so successfully in the past now applies to both parties.  With a $2 billion state surplus the Republican legislative supermajorities and governor had the opportunity to ease the crushing tax burden on homeowners.

Instead, they opted to give very generous tax breaks to corporations — and now they have a tax revolt on their hands.  The burning question is what they’re going to do about it. But one thing seems certain: as the election made clear, the days of “tax-and-spend” for either party, as well as state and local governments, have come to an end.

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