Missoula, MT – Property taxes dominated discussions in the Montana Legislature on Wednesday as both the House and Senate gave initial approval to multiple bills aimed at providing tax relief. However, with significant hurdles still ahead, lawmakers cautioned that the final property tax plan is far from being settled.
Rep. Llew Jones, R-Conrad, acknowledged the complexity of crafting a workable property tax solution, noting, “This is a difficult problem to make work.” Despite the challenges, both chambers endorsed five bills, though several legislators made it clear that much more work remains to be done before the final package is ready.
Sen. Forrest Mandeville, R-Columbus, urged his colleagues to take action rather than delay progress. “We can’t talk about doing something for years, come up here and vote against bills because they’re not perfect, okay? We need to do something, we promised to do something – let’s do something starting today, by voting yes,” Mandeville said.
House Bill 231 – A Key Component of the Governor’s Tax Relief Plan
One of the most significant pieces of legislation advancing in the House is House Bill 231, also known as the “homestead” bill, which is Governor Greg Gianforte’s top property tax priority. The bill proposes reduced tax rates for most Montanans’ primary residences, long-term rentals, and smaller commercial properties, while raising rates on properties that do not qualify for those benefits.
Rep. Jones, the sponsor of HB 231, admitted that the bill is not perfect, but emphasized that it would bring substantial benefits. “Is this bill perfect? No,” Jones said. “I wish I could have figured out how to do a perfect bill, I don’t know how. It does do good work.”
However, some lawmakers believe the bill does not go far enough to address the rising property values that have placed a heavy burden on taxpayers. Rep. Terry Falk, R-Kalispell, proposed adding $90 million in annual rebates for property taxpayers, but his amendment was rejected. Falk argued that the bill should provide more substantial relief to those struggling with increasing property values.
“We just need to give some real help here,” Falk said. “Let’s respect our taxpayers.”
Rep. Jones countered that the rebate proposal would divert funds that could be used for other state priorities, such as building prisons or repairing roads.
Linking Bills to Spur Broader Tax Reform Discussion
In an effort to create a more comprehensive property tax relief package, HB 231 has been amended to tie it to another bill, House Bill 154, a priority for House Democrats. HB 154, sponsored by Rep. Jonathan Karlen, D-Missoula, would establish a “housing fairness” income tax credit for both homeowners and renters earning under $150,000. The credit would help offset some of the property taxes paid by lower-income Montanans.
Rep. Karlen argued that other property tax proposals did not take into account a resident’s ability to pay. “We can’t just assume everyone is in the same financial situation,” Karlen said. House Minority Leader Rep. Katie Sullivan, D-Missoula, expressed her support for linking the two bills, stating that it would foster more meaningful conversation around the property tax issue. “I think many legislators want to see more than one bill continuing – not just have one thing be the final thing,” Sullivan said.
Senate Moves Forward with Additional Proposals
The Senate also made progress with its own property tax proposals. Senate Bill 90, sponsored by Sen. Carl Glimm, R-Kila, received unanimous approval and applause from members. The bill would allocate funds from taxes on hotels, campgrounds, and rental vehicles to provide a property tax credit for primary residences valued at less than $1 million.
The Senate also gave initial approval to Senate Bill 32, sponsored by Sen. Jeremy Trebas, R-Great Falls. This proposal would set the property tax rate for most types of property at 1.65%, with a lower rate of 1.25% for owner-occupied residences. SB 32 would also adjust the requirements for local governments to raise tax collections in response to inflation.
Ongoing Debate and Legislative Timeline
Governor Gianforte has repeatedly urged lawmakers to act swiftly on HB 231, hoping to see the bill on his desk by mid-February to provide property tax relief to Montanans this year. However, with the February deadline passed, Senate President Matt Regier, R-Kalispell, suggested that lawmakers will take a more measured approach, including a roundtable discussion to further explore the various property tax proposals.
“There’s going to be a roundtable conversation that happens at the end for property taxes – that’s just my crystal ball,” Regier said.
As of now, all of the bills that advanced on Wednesday will need to pass a final vote before being sent to the other chamber for further consideration. With several complex issues still on the table, it remains unclear when a final property tax relief package will emerge from the Legislature.
