Senate Taxation Committee moves major property tax bills to Senate floor

The Senate Taxation Committee made headway on the property tax debate by moving several bills originating in the House through the committee on Wednesday morning, despite reservations by several legislators.

Gov. Greg Gianforte’s favored bill, House Bill 231, brought by Rep. Llew Jones, R-Conrad,  moved on, as did House Bill 155, which has become a flagship bill from Democrats in both chambers. Some Republicans also feel rebates are the way to provide tax relief, while the HB 231 camp and the Democrats try and adjust tax rates.

House Bill 528, which was a late, under-the-radar and bipartisan bill from Rep. Ed Byrne, R-Bigfork, was tabled in the committee.

A motion to reconsider House Bill 154, a renter tax credit Democrats had previously hinted wasn’t dead, also failed to move to the floor. Senate Bill 90, a bill favored by Senate President Matt Regier, R-Kalispell, and conservative members of his caucus, continues to hang around as a property tax option in the House.

SB 90 is a tax rebate that Democrats say does not provide enough relief. SB 90 has been added to HB 924, which includes a property tax credit. That legislation that would create a $1 billion trust that serves multiple interests, including childcare, infrastructure and disaster resilience. 

“Senate Bill 90 is alive and well,” Sen. Greg Hertz, chair of Senate Taxation said during the meeting.

His words were foreshadowing — Rep. Katie Zolnikov, R-Billings made a reconsideration motion on SB 90 during the House’s floor session. Around a dozen House members rose to speak during discussion on the blast motion, which ultimately failed by one vote.

“I’m extremely disappointed in my Republican colleagues who missed the vote,” Zolnikov said. “I’m curious as to what could have been more important than 22 minutes of debate on the single issue we’ve heard the most about from our constituents.”

The committee made several amendments on both HB 155 and HB 231. For HB 155, brought by Rep. Mark Thane, D-Missoula, the amendment included language to roll back property tax rates to 2024 and provide a homestead exemption on the first $50,000 of a home, bringing some Democrats into opposition because of those changes.

“155 now is different. It’s changed,” Sen. Mary Ann Dunwell, D-Helena said during the meeting. “I went from a yes to a no. It’s changed that much.”

Amendments to HB 231 included pushing the effective date back, as the bill was originally looking to be passed in March, and adding language to help fix a major hurdle for much of the property tax legislation — issues with charters in several cities that could see an increase local property taxes with the bill as introduced.

Language in HB 231 was amended to give local governments the option to switch from a mill-based levy to a dollar-based levy should they so choose.

There was also some debate over whether reimbursing cities with charters that conflict with state money could be a realistic option. Hertz said he thinks telling cities to ignore their charters is unconstitutional and had little doubt it would be challenged in court.

HB 155 and HB 231 will now head to the Senate floor for the full Senate to consider. Property taxes remain a major hurdle for the Legislature as the end of the session nears and Montanans face another jump in property values.

“I committed to Representative Jones to get this bill out of here,” Hertz said of HB 231. “I don’t like it. It’s more or less a Frankenstein bill now, but I hope we can get this bill out of here so we can have the discussion on the floor.”

This story has been updated with a comment from Rep. Katie Zolnikov.