Property tax discussions drag on as worries of ‘stalemate’ persist

Tax Day, on April 15 this year, is the country’s initial deadline for filing taxes and in Montana’s capitol on Tuesday, taxes were the main topic of conversation for leadership of both parties.

But on day 76 of a maximum 90 day session, legislators were still debating a couple of key proposals they’d debated back in January.

Senate President Matt Regier said on Tuesday there was a chance the discussion could come to a “stalemate” but also described the discussion around property taxes as “right there.”

He went on to say some of the slow roll dealt with legislators wanting to see their bills get through before the session ends, which could impact how they vote on property tax proposals.

Property tax reform is seen as the major obstacle to the Legislature coming to a close. Deals and amendments to bills have been circulating and likely will only increase in number as the session gets closer to the finish line.

In his state-of-the-state address in January, Gov Greg Gianforte called on the legislature to send the homestead rate cut proposal to his desk within a month —  a deadline that passed without action. At a press conference last week, Gov. Greg Gianforte said his position on prioritizing property tax relief hadn’t changed. 

“Montanans sent us here to act to get the job done, and we must,” Gianforte said last week. “I remain committed to cutting taxes for Montanans at every income level, leaving them more of their hard-earned money.”

Tuesday, Regier said it’s a matter of getting the “property tax pieces” together.

“And once we do that, I think the floodgates will break, at least here in the Senate,” Regier said.

Executive action on a number of bills currently in the Senate Taxation Committee is expected on Wednesday morning, with the chair of the committee, Sen. Greg Hertz, saying they were looking to clear out their docket.

Some Republicans have pushed the Governor’s Homestead Act, House Bill 231, which changes some rates and targets second homes, but the bill has seen obstacles in the Senate after getting through the House. It was tabled in the Senate tax committee but revived a week later.

Several cities, including Billings, have said it will increase property taxes in their locales, or cut services, like police and firefighters. Regier also noted concern on raising taxes on second homes from conservative members of his caucus.

“Raising Montana’s property taxes, whether that’s them doing an Airbnb or, like the family cabin, they said to me, that’s it,” Regier said. “I think for a lot of Republicans on this side, it’s a no go.”

One option some Republicans, including Regier, have pushed is Senate Bill 90, which aims to provide a property tax credit and is also at a standstill.

It would use lodging tax and rental car revenue to fund the credits. Some Democrats have bristled at the idea a rebate is the property tax solution Montanans are looking for.

“Last sessions, Band-Aid rebate checks were not enough,” House Minority Leader Katie Sullivan said on Tuesday. “Taxes have grown higher.”

SB 90 has already passed through the Senate, but did not make it through committees on the House side. An attempt to use a blast motion to move the bill onto the House floor narrowly failed on April 11, but SB 90 could be blasted again, Regier said. He said it could be implemented quickly and its funding stream was flexible.

“We could pass SB 90 right now, have it to the governor’s desk by Friday, and then the very next week … we could dump in one-time only money,” Regier said

During a press conference on Tuesday, Democratic leadership blamed Republicans for not being serious about property tax relief and not taking enough time on the issue.

Sullivan brought a clock with her to the press conference, saying she’d used it to track the amount of time spent arguing over “bathrooms, abortions and talking about chemtrails.”

The mood from their caucus was, in short, frustrated.

“We spend an incredibly large amount of our time on the floor debating things that have nothing to do with taxes,” Sullivan said. “If you were to compare it to the amount of time we spent on property taxes, there’s a huge difference.”

Democratic leadership also hinted that Rep. Jonathan Karlen’s House Bill 154, which is a targeted property tax credit toward renters, may also come off the table.

Rep. Ed Byrne’s House Bill 528 had a hearing earlier this week and it passed out of the House with significant bipartisan support. The bill was amended by Sen. Emma Kerr-Carpenter, D-Billings, to attempt to alleviate a potential conflict with city charters, like Billings’. The amendment would direct cities to ignore mill levy limits in their charters, though it’s unclear if that has legal standing.

But Byrne, a representative from Bigfork, also mentioned SB 90 during his testimony, saying it “stands on its own (and) is probably the best bill out here for what we’re looking at.”

The legislature does have other options, including a proposal from Sen. Wylie Galt, R-Martinsdale, to freeze property taxes for two years. On that bill, Regier said, “everything is on the table.”

Democrats, meanwhile, said it wasn’t nearly enough.

“That’s kind of kicking the can down the road,” Senate Minority Leader Pat Flowers, D-Belgrade said. “And that’s in some ways no better, and maybe worse, than a rebate.”