Property tax reappraisal bill is fair

Property-tax reappraisal and the appropriate mitigation strategy was a major issue for the 2009 Legislature. Residential property values increased 55 percent from the last statewide reappraisal in 2003, and 73 percent in Flathead County. Mitigating this increase in property values in a way that met the mandates of the Montana Constitution and is fair across the state is a very complex issue.

The increase in property values caused many Montanans to worry about the coming increase in property taxes. The legislature was successful in mitigating a property-tax increase by using a version that closely resembles the mitigation strategy used in the last reappraisal cycle.

Flathead County will see an increase in residential property taxes of approximately 1 percent per year because of our higher-than-average increase in appraised value. This mitigation plan reduces the impact of the high reappraisal and corresponding tax increase as much as the Constitution will allow.

Key points of House Bill 658 include:

• 2008 property values will phase in over six years, with a corresponding effective tax-rate decrease. A residential property with a 55 percent increase in valuation should see no increase in property taxes because of the 2008 reappraisal.

• The effective tax rate on residential property goes down to 0.7 percent in 2014, from 1.07 percent in 2008. Residential property is revenue neutral by class.

• A $200,000 home pays twice as much property tax as a $100,000 home.

• The legislature put in a two-year look-back provision so we can look at the 2008 reappraisal values in the 2011 Legislature and make changes if needed. This provision is a positive factor for Flathead County with our rapidly changing property values.

• The current elderly, low income, renters tax credit, the Disabled Veterans credit, and the extraordinary property-tax-relief program are maintained in their current configuration.

This mitigation bill was preferred by the majority of Republicans and many Democrats. The ugly fact of mitigation of reappraisal is that someone has to pay. As you lower the tax bill for one property owner, you must raise taxes dollar-for-dollar on another property owner.

The plan pushed by Rep. Mike Jopek, D-Whitefish, and some Democrats would have raised property taxes $60 million on some property-tax payers only to give it to another class of property owner. This form of wealth redistribution/transfer payment met with great resistance from the Republican majority.

HB 658 helps the truly needy and taxes the rest of the property owners in Montana in a fair, flat manner within the mandates of the Montana Constitution.

Bruce Tutvedt, R-Kalispell, represents Senate District 3, rural Whitefish.