Let’s pass a bill that provides real tax relief

Escalating property taxes are hammering many Montana homeowners and Republican and Democratic legislators alike are responding with different proposals to reform our property tax system. While we are confidents some of these proposals will pass, they all share a common limitation.  

Under Montana’s approach to taxation, property taxes are the sole source of tax revenue for our local governments. When the Legislature reforms the formula to reduce property taxes for one class of property, the lost revenues must be made up by another property class.   

To reduce the burden on Montana property taxpayers, the only correct answer is to find a new source of revenue. To achieve this, we are bringing a bill we call the Local Option Property Tax Relief Act (LOPTRA) which targets the 13 million tourists that visit Montana every year. By tapping into our tourist industry, we can benefit all Montana property taxpayers.   

At the request of many county commissioners and mayors, our bill gives counties the option to place a tax targeted at tourists in front of their voters. If voters approve these proposals, local governments will expand their tax base and be able to provide tax relief that does not require penalizing some property tax owners to benefit others.   

Here’s what’s in our bill:   

Authority for Montana counties to place a targeted tourism tax in front of their voters on general election ballots. 

The tax, of up to four percent, would be on items that travelers use, including hotels, restaurants, bars, and guiding services. 

All revenues raised from LOPTRA, except for a small percentage for the overhead of collecting the tax, would be dedicated to property tax relief. 

The authority for counties to require rental property owners to reflect their property tax reductions in their rental rates.     

Ten percent of the taxes collected would be shared with counties without much tourist traffic, but again, dedicated to property tax relief. 

A ten-year automatic sunset that gives voters in counties that approve a local option tax the power to extend the tax for another ten years. 

We know from experience that local option taxes aimed at tourists work and are popular with voters. Since 1985, when the Legislature authorized a resort tax, resort communities such as West Yellowstone, Whitefish, St. Regis and Red Lodge have been able to levy a local sales tax aimed at tourists. These local option taxes have been strongly supported by local residents and have been reauthorized again and again by voters and with wide margins of support.   

When Montanans visit other states we pay taxes almost everywhere – tourism fees – that support their state and local governments. We need to enjoy the same benefit in our state from tourism dollars. Local option taxes, only imposed with voter approval, will be a steady revenue stream and will increase as our tourism industry grows.  We must capture this untapped revenue to reduce the tax burden on our property taxpayers.   

In introducing LOPTRA, we are committed to a bipartisan bill that is supported  by local governments from both red and blue counties.  Whether counties are urban or rural, local governments need additional flexibility if they are to provide the property tax relief that Montanans are demanding and the government services that residents expect. The Montana Legislature needs to give local governments the ability to enact local option taxes and trust local governments and their voters to provide real tax relief to Montana taxpayers.  

Rep. Greg Oblander is a Republican who represents House District 38 which includes Musselshell, Golden Valley and part of Yellowstone counties.  Rep. Tom France is a Democrat who represents House District 99 in Missoula County.