HELENA — Democrats in the Montana Legislature said a tax shift in the state has put too much pressure on residential property taxpayers, and they want to introduce a plan to address that.
“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,” said Sen. Pat Flowers, D-Belgrade, the Senate minority leader.
During a Monday news conference at the State Capitol, Flowers and Rep. Jonathan Karlen, D-Missoula, announced three pieces of legislation they’re proposing for the 2025 legislative session:
- The first would create a “homestead exemption,” exempting the first $50,000 of a home’s value and the first $200,000 of a small business’s value from taxation.
- The second would reform residential property tax rates, creating multiple brackets based on a home’s value, so more expensive properties would have higher tax rates.
- The third would create a “Housing Fairness Tax Credit,” similar to an idea Karlen introduced during the 2021 session. It would offset part of eligible residents’ property taxes if they exceed a specific share of the owner’s income.
“Montanans can't control skyrocketing home values, and as a result, working families and seniors are being priced out of their homes and their communities,” Karlen said.
Democrats estimated the total plan would reduce residential property taxes by $214 million and small business taxes by another $14 million.
Flowers said they would partially make up the difference by reversing what he described as $100 million in “tax giveaways to major corporations.”
Democrats said, because of the way local governments can adjust their mill levies, the changes should not have a significant impact on city, county or school district revenues.
As the minority party in the Legislature, Democrats have put blame on Gov. Greg Gianforte and majority Republicans for not doing more last session to provide long-term property tax relief.
“We knew it was coming, we knew how to prevent it, and they did nothing,” Flowers said.
Republicans have touted the millions of dollars in property tax rebates they approved in 2023, which will again be available to homeowners this year.
Gianforte also put together a task force to study longer-term responses to rising property taxes. They’re expected to bring out a report with recommendations to Gianforte next month.
“While some Democrat politicians are grandstanding with press conferences and Twitter videos, Governor Gianforte is delivering solutions to the problems facing hardworking Montanans, including Biden's affordability crisis,” said Sean Southard, Gianforte’s communications director, in a statement.
“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.”
