Tax Relief

Legislature has not given any significant property tax relief ~ Missoula Present

We agree with part of the guest opinion of Republican Montana Rep. Brad Tschida on May 11th in the Missoulian: Property taxes are a major concern of our residents. We vehemently disagree that repairing this system is the sole responsibility of the cities and counties. But first, let’s check Rep. Tschida’s allegations, which he calls fact.

Tschida writes that cities and counties account for 85% of your tax burden, while the state accounts for 15%. That is a false statement.

For a typical city dweller, the city accounts for 30% of the tax burden. Local schools account for 34 percent of the tax burden. Missoula County is 21 percent, government agencies like Mountain Line 4 percent, and the state of Montana 11 percent for education. You can see the distribution of your tax bill on Missoula County’s excellent property tax website.

Tschida also writes that the city’s annual property tax increase has been 5.4% since 2001, and attributes this increase solely to actions by local authorities. He ignores the fact that Missoula is one of the fastest growing cities in the region. During that period, Missoula’s tax base increased an average of 2.1%, due to residents and businesses investing in renovating and building new buildings.

Our total taxable value increased 76.2% because the state of Montana property values ​​increased. It happens in vibrant, growing communities. We will also find that government income tax revenues increased 4 percent annually over the same period.

MEP Tschida blames tenants for the success of electoral initiatives and ignores the fact that a significant part of rent payments is used to pay property taxes. Rep. Tschida and others view residents who rent their apartments as second-class citizens who do not have to pay real estate taxes, even though tenants pay the bills for property owners and like homeowners are subject to market forces.

And these electoral initiatives are paying off for schools, open spaces, libraries, fire trucks, and more because local voters value these institutions and services. Our residents demand these services and assistance in order to pay for them, but it is increasingly untenable to walk in the same one-legged chair of property taxes.

Let’s talk about what lawmakers did to reform property tax in 2021: Legislature passed HB663, which provides for a reduction in state property taxes that is offset by estimated marijuana revenues. The total funding for this bill is $ 10 million nationwide, which is about 0.5% of all Montana property taxes.

The legislature (again) also lowered the trade tax. This will result in tax responsibility shifting further onto homeowners and renters. In fact, Missoula’s tax base has shifted from 42.9% in 1999 to 59.0% in 2020. Legislative decisions have a major impact on the composition of our tax base.

Legislators also overturned Missoula’s choice of the local option gas tax. This tool has been legally available for decades, and Missoula County last summer urged voters to consider a 2 cents per gallon tax to help meet critical road needs without adding further burdens to property taxpayers. Missoula County residents voted yes on this issue, but lawmakers challenged the will of Missoula County’s voters and re-taxed property taxpayers.

Legislators have not approved major property tax reform initiatives, such as a measure to cap property taxes based on income or a local option tourism tax that provides direct and meaningful property tax relief to cities willing to ask would have voters for support. These tourist taxes, levied in Whitefish, Red Lodge, West Yellowstone, and St. Regis, lower property taxes for local residents and more than offset sales taxes paid by locals.

Real estate tax reform is a critical need for the state of Montana. However, this cannot only be done by cities and counties. We hope that Rep. Tschida will see local governments as partners in reforming property taxes, and not as wasteful enemies blamed for the problem.

Signed,
Missoula Mayor John Engen
Missoula County’s Commissioners, Dave Strohmaier, Juanita Vero, and Josh Slotnick
Missoula City Council President Bryan von Lossberg
Gwen Jones, Vice President of Missoula City Council

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