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The supplemental property tax bills heading to property owners around the state this month, made necessary by a November Supreme Court decision, represent a monumental headache for both local tax officials and homeowners.
They also illustrate how the tax issue has driven a wedge between Gov. Greg Gianforte, a Republican seeking re-election this year, and local government leaders across Montana’s political spectrum.
Nearly all of the dollars collected by Montana’s property tax system flow, directly or indirectly, to local government programs like schools, law enforcement and park maintenance. As such, Gianforte has repeatedly argued that rising residential taxes are fundamentally a problem with local government spending, as opposed to anything his state government has done wrong.
“Property taxes are driven by local spending, the schools and local municipalities,” Gianforte said during an appearance on KGVO’s Talk Back program this week. “None of your property tax goes to the state.”
That position tends to rankle school executives, county commissioners and other local government leaders who generally believe they’re doing a fine job managing their budgets — and who argue that the fundamental fault for taxpayers’ woes lies in the mechanics of the state-level tax code set by the governor and the state Legislature.
Last year, a bipartisan group of county commissioners representing 49 of Montana’s 56 counties launched an intergovernmental tax revolt of sorts, having concluded that the state’s rapid property value growth meant they shouldn’t collect the full value of the state’s “95 mill” school equalization tax. That put them at odds with Gianforte’s revenue department and education advocates, who noted that the state budget had been passed under the assumption that the full amount would be available for a program that subsidizes tax-base-poor districts. (County leaders said the state’s flush General Fund could readily make up the difference.)
The fight tumbled into litigation, where the Montana Supreme Court ultimately sided with the governor, concluding that his administration’s position was consistent with decades of past practice. The ruling ordered counties to collect the full amount but didn’t come until after the initial wave of 2023 tax bills were put in the mail last fall. This spring’s supplemental tax bills — and the accompanying frustration — are the end result.
As they send their supplemental tax bills, many counties are trying to cast the situation as a stymied effort to throw their taxpayers a bone. Suggested language circulated by the Montana Association of Counties for inclusion on the spring notices stresses that the additional collection is coming only because the court ordered it.
At least one county, Gallatin County, is going even further, pointing the finger directly at Gianforte as it tries to explain the situation to its taxpayers. A billing statement received by an MTFP staffer in Bozeman reads, in part: “These additional tax collections mandated by the Governor will be sent to the State of Montana.”
Asked in an interview this week whether he thinks his administration did enough to avoid the current tax mess, Gianforte pointed to the state’s property tax rebates, acknowledging they represent a “temporary solution,” as well as a tax task force he’s established to explore long-term legislative fixes. Specific to the 95 mills situation, the governor also said he believes the state has a “statutory obligation” to collect the full amount.
“I’m always for lower taxes,” Gianforte said, “but we need to fund our schools.”
—Eric Dietrich, Deputy Editor
Fact Check ✔️
Republican Gov. Greg Gianforte has sought to defuse widespread frustration over rising property taxes by stressing that he and the state Legislature allocated money last year to provide $675 property tax rebates to homeowners this year and next, for a potential total of $1,350 in aid per homeowner.
However, as the presumed Democratic nominee for governor, Ryan Busse, works to win votes from disaffected taxpayers, his campaign is arguing that one of the governor’s go-to talking points exaggerates the scale and the impact of those rebates.
In an email to “interested media” Wednesday, Busse campaign manager Aaron Murphy noted that Gianforte has repeatedly said in talk radio, television and podcast interviews that the state provided rebates to “every Montana homeowner” — a statement Murphy described as a “lie.”
In fact, as Murphy noted, the state’s decision to require taxpayers to apply for the property tax rebates instead of sending checks automatically — as it did with the $1,250-per-adult income tax rebates also authorized last year — means not every eligible homeowner received one.
Murphy scolded the state’s press corps for not being more aggressive in calling the governor out, writing that “Montana voters deserve the truth.”
Jake Eaton, Gianforte’s campaign manager, acknowledged the distinction in an interview Thursday.
“You can certainly make the claim it’s a little more nuanced than ‘every Montana homeowner,’” Eaton said.
Pinning down a precise number for how many homeowners missed out on the rebate is difficult. As lawmakers considered the rebates last year, the Montana Department of Revenue initially estimated 292,000 homeowners would be eligible. When MTFP compared that figure to the number of actual applications for the first round of rebates last fall, however, a department spokesman said its analysts had concluded the initial estimate was too high, but didn’t provide an updated figure.
A presentation by a department analyst at the governor’s property tax task force earlier this month indicated the state had paid out rebates to 215,611 taxpayers — more than 76,000 short of its initial eligibility estimate.
More broadly, Busse and other Democrats have argued that the rebate application process, which required property owners to provide information assembled from multiple sources, was unduly burdensome. The revenue department said previously that the application process was necessary in part because it had no other way of knowing what Montanans who own multiple properties consider their primary residence.
While property taxes rose statewide by 21% on median last year, an MTFP analysis of tax department data estimated that about three-quarters of residential properties saw taxes increase by less than the amount of the $675 rebate.
Combined, a married couple who owns their home could ultimately receive $3,850 in state rebates this year and next — $2,500 in income tax rebates and two $675 property tax rebates. However, Montana households that didn’t record enough income to pay that much in taxes in 2021 have received lower income tax rebates — and the property tax rebates aren’t available to households that rent instead of owning their home.
—Eric Dietrich, Deputy Editor
Close-up
Lily Gladstone was honored Tuesday, March 26, 2024, with a headdress that signifies leadership and respect. Credit: JoVonne Wagner / MTFP
Hundreds gathered this week in Browning, headquarters of the Blackfeet Nation, to welcome home and celebrate award-winning actress Lily Gladstone, who was raised on the reservation. Gladstone, who starred in Martin Scorsese’s film, “Killers of the Flower Moon,” was honored with a stand-up headdress, a tradition that recognizes a member of the community who has demonstrated leadership, respect and responsibility. JoVonne Wagner covered the event for MTFP.
READ MORE: Lily Gladstone: Paving the way.
For the Record
An effort by supporters of Cascade County Clerk and Recorder Sandra Merchant to reinstate the election oversight duties stripped from her by county commissioners in December has proved unsuccessful. Petitioners looking to put the issue up for a reconsideration vote on the June primary ballot were still thousands of signatures short of the total required to qualify as of a deadline last week.
The Cascade County Commission voted 2-1 on a resolution removing Merchant as county election administrator in December, leaving her the county clerk but transferring election oversight duties to a non-partisan commission appointee. Backlash from Merchant’s supporters was swift and fierce, with many accusing the commission in subsequent public comment periods of undermining the will of voters in the 2022 election that installed Merchant as clerk by a slim margin of less than 40 votes. Under Montana law, citizens had 90 days to gather enough signatures to put the question of repealing the resolution on the next countywide ballot.
When Montana Free Press checked with the county elections office last week, one day ahead of the deadline, the petition still hadn’t met the roughly 7,300-signature certification threshold. Jeni Dodd, a Great Falls resident who spearheaded the effort, confirmed for MTFP this week that last she heard, petitioners had managed to collect fewer than 2,000 signatures. Dodd attributed the shortfall to the suddenness of the commission’s action, lack of widespread awareness of the petition effort and what she characterized as a narrow timeframe allowed in state law.
“It wasn’t that folks weren’t interested,” Dodd wrote via email. “I believe the failure was mainly a matter of timing and circumstance.”
Local elections in Cascade County will continue to be overseen by Terry Thompson, the former CEO of the Great Falls Association of Realtors, who commissioners unanimously appointed to the new position in February.
—Alex Sakariassen, Reporter
The Viz
The “Viz” item we ran in last week’s Lowdown, charting the growth rates of Montana’s most-populous counties, contained an omission: Cascade County, which does in fact contain Montana’s third-largest city, Great Falls.
Here’s what that chart would have looked like:
While Montana’s other populous counties — Yellowstone, Missoula, Gallatin and others — have seen consistent (though slowing) growth over the past decade, Cascade County has instead seen its population hold essentially steady. It’s grown a bit some years and declined slightly others, according to figures from the U.S. Census Bureau.
My sincere apologies to those Great Falls-area readers who felt left out of the fun last week.
—Eric Dietrich, Deputy Editor
Dept. of Corrections
In last week’s Lowdown, we misrepresented the age of the National Organization to Save Flathead Lake, a group that has been active in Flathead Valley dam management issues. We reported that the group, which earlier this year petitioned federal energy regulators to intervene in dam management to keep more water in Flathead Lake in summer months, was formed recently.
That is incorrect. NOSFL formed in 1985 when federal regulators agreed to turn over full operation of the Séliš Ksanka QÍispé Dam (then Kerr Dam) to the Confederated Salish and Kootenai Tribes in 2015.
Save Flathead Lake, a separate group that is also troubled about low water levels, formed last year. We regret the error.
—Amanda Eggert Reporter
On Our Radar
Amanda — A reporting project on a carbon sequestration proposal has had me pondering the technology we use to pull material out of the Earth — and what it shares in common with the tools we use to put some of it back in. I therefore found myself thinking about Deepwater Horizon, a film that describes some of the mechanics involved in the exploration and drilling of a deep sea oil well that went famously awry in 2010.
Alex — The Guardian has been producing a steady stream of stories the past few weeks investigating the scope and internal workings of a secretive far-right group advancing Christian nationalist ideology in America. The latest installment focuses on an Idaho college professor’s involvement in those efforts.
Arren — Opening day was Thursday. Baseball is back. Balance has been restored to my life. Here’s a video of yesterday’s home runs. And here’s to another year of blasts, moonshots, yachts, rockets, missiles, slams, dongs and so on.
Brad — Our newsroom had the pleasure this week of picking the brains of former Great Falls Tribune reporter Eric Newhouse and publisher/editor Jim Strauss, the primary producers of the most recent Pulitzer Prize-winning journalism published in Montana. That 1999 series, which focused on the community costs of alcohol abuse, has aged in all sorts of interesting ways. I’ve been learning a lot revisiting it.
JoVonne — In this day and age, encountering artificial intelligence seems to be inevitable online, but what should the rules be when it comes to AI and cultural appropriation? ICT’s Kevin Abourezk reported on a controversy around Dutch-based clothing brand “Nizhoni,” whose namesake is the Navajo word for “beautiful.” The story follows how the brand apparently used AI-generated photos and statements to justify its name.
Eric — Ever had the urge to watch a mild-mannered YouTube chef use pancakes to explain the difference between baking soda and baking powder? Me neither, until the algorithm did me a solid this week.
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