Property tax bill draws supporters and opponents

Senate Bill 157, sponsored by Sen. Bruce Tutvedt, R-Kalispell, passed in the Senate by 25-22 on March 28. The committee took no immediate action on the bill.

Supporters included the state Revenue Department, Montana Taxpayers Association, Montana Association of Counties, Montana County Treasurers Association, the State Tax Appeal Board, Missoula County, the Montana Chamber of Commerce, the city of Missoula, Montana Farmers Union and the Montana League of Cities and Towns.

Opposing SB 157 were the Montana Association of Realtors, Montana Wood Products Association, F.H. Stoltze Land and Lumber Co., and Plum Creek Timber Co.

Tutvedt said his bill would shorten the reappraisal cycle from the current six years to two years for residential, commercial, agricultural and forest land property.

It also would eliminate the current six-year phase-ins of property values and tax rates and discontinue homestead and comstead exemptions, which have been used to mitigate tax impacts from rising property values over six years. The bill calls for replacing the exemptions with a multiplier.

Tutvedt said SB 157 would simplify property tax calculations. The appraised value of property would be multiplied by the tax rate and the mills to determine the taxes owed instead of phasing-in property values, taxes rates and exemptions over six years, if the property values are higher. However, if a property value decreases after reappraisal, the lower values would take effect immediately.

State Revenue Director Mike Kadas endorsed the bill and praised its attempt to start focusing on needed property tax transparency and simplification. He said the department would need 12 new full-time employees to work on the new shorter reappraisal cycle.

Bob Story, president of the Montana Taxpayers Association, said his group backed the bill because the shorter reappraisal cycle creates more equity and simplifies the system.

Opponent Joe Roberts, representing the Montana Association of Realtors, cited Revenue Department statistics that show the value of total residential property in Montana dropped by nearly 3 percent from 2014 to 2015. Yet under SB 157, the total property taxes paid by residential taxpayers would increase by more than 4 percent, he said.

Julie Altemus, executive vice president of the Montana Wood Products Association, urged the committee to remove forest lands from the bill. She said SB 157 was “unjust, punitive and costly to forest landowners,” who will likely convert their timberland to higher value uses.

Mark Baker, speaking on behalf of Plum Creek Timber Co., said the forest products industry has faced challenges in recent year, with Plum Creek forced to close a facility in Pablo and cut its Montana workforce from 1,200 to 700. He noted that the growing cycle for timber is 80 years, while SB 157 would make the reappraisal cycle two years.

A bill to revise state property reappraisal laws and shorten reappraisal cycles attracted a lot of interest during its April 8 hearing in the House Taxation Committee, with opposition from Realtors and the wood products industries.

Senate Bill 157, sponsored by Sen. Bruce Tutvedt, R-Kalispell, passed in the Senate by 25-22 on March 28. The committee took no immediate action on the bill.

Supporters included the state Revenue Department, Montana Taxpayers Association, Montana Association of Counties, Montana County Treasurers Association, the State Tax Appeal Board, Missoula County, the Montana Chamber of Commerce, the city of Missoula, Montana Farmers Union and the Montana League of Cities and Towns.

Opposing SB 157 were the Montana Association of Realtors, Montana Wood Products Association, F.H. Stoltze Land and Lumber Co., and Plum Creek Timber Co.

Tutvedt said his bill would shorten the reappraisal cycle from the current six years to two years for residential, commercial, agricultural and forest land property.

It also would eliminate the current six-year phase-ins of property values and tax rates and discontinue homestead and comstead exemptions, which have been used to mitigate tax impacts from rising property values over six years. The bill calls for replacing the exemptions with a multiplier.

Tutvedt said SB 157 would simplify property tax calculations. The appraised value of property would be multiplied by the tax rate and the mills to determine the taxes owed instead of phasing-in property values, taxes rates and exemptions over six years, if the property values are higher. However, if a property value decreases after reappraisal, the lower values would take effect immediately.

State Revenue Director Mike Kadas endorsed the bill and praised its attempt to start focusing on needed property tax transparency and simplification. He said the department would need 12 new full-time employees to work on the new shorter reappraisal cycle.

Bob Story, president of the Montana Taxpayers Association, said his group backed the bill because the shorter reappraisal cycle creates more equity and simplifies the system.

Opponent Joe Roberts, representing the Montana Association of Realtors, cited Revenue Department statistics that show the value of total residential property in Montana dropped by nearly 3 percent from 2014 to 2015. Yet under SB 157, the total property taxes paid by residential taxpayers would increase by more than 4 percent, he said.

Julie Altemus, executive vice president of the Montana Wood Products Association, urged the committee to remove forest lands from the bill. She said SB 157 was “unjust, punitive and costly to forest landowners,” who will likely convert their timberland to higher value uses.

Mark Baker, speaking on behalf of Plum Creek Timber Co., said the forest products industry has faced challenges in recent year, with Plum Creek forced to close a facility in Pablo and cut its Montana workforce from 1,200 to 700. He noted that the growing cycle for timber is 80 years, while SB 157 would make the reappraisal cycle two years.