On Friday, the Montana House made progress in advancing a bill that aims to enhance one of the key methods in Montana’s efforts to protect low-income homeowners from being burdened by excessive property taxes.
House Bill 189 would raise the portion of a home’s value that can qualify for property tax assistance under the state’s Property Tax Assistance Program, upping the limit from $200,000 to $350,000. It would also increase the income threshold for qualifying in the program, making ongoing property tax relief available to individuals who make up to $27,621 a year and couples who make up to $37,019.
The House gave a preliminary endorsement to the bill, sponsored by Rep. George Nikolakakos, R-Great Falls, on a bipartisan 81-19 vote Friday. A final vote to advance the measure to the Senate is expected Monday.
According to the existing state legislation, individuals with incomes of $21,032 or less, as well as couples with incomes of $28,043 or less, are eligible to seek a reduction in their taxes on their main residence. This means that property owners with very low incomes can potentially have their tax bill reduced by up to 80%.
A study on the assistance program conducted prior to this year’s legislative session noted that the program’s existing home value limit had fallen behind the state’s rapidly rising home prices. In 2015, the year the $200,000 limit was set, it was enough to cover the entire assessed value of more than four in five properties enrolled in the assistance program, legislative staff reported. This year, it’s expected to do the same for only two in five enrolled properties.
After receiving unanimous approval with a 100-0 vote on Jan. 27, HB 189 underwent revisions by the House Appropriations Committee, resulting in a reduction of the home value to $300,000. However, the complete chamber voted on Friday to reinstate the initial threshold of $350,000.
During the floor debate on Friday, Rep. Bill Mercer, a representative from Billings, expressed his support for the lower price. He argued that it was necessary to consider the burden it would place on other property taxpayers who would have to cover the costs for program participants seeking relief.
Mercer stated that it is necessary to establish a boundary, and the higher the boundary is set, the greater impact it will have on the rest of the property tax payers’ segment.
According to Nikolokakos, adjusting the original $200,000 threshold to account for the recent increase in home prices in the state would roughly amount to $350,000.
He claimed that the shift has already occurred and our current efforts are simply forcing the shift to revert.
