Cost of living on the rise

New construction booms as people continue to move to the Gallatin Valley. The city of Bozeman has struggled to provide the services associated with rapid growth without overburdening property tax owners. The state Legislature’s interim revenue committee discussed the challenges local governments and homeowners are facing during a meeting in Helena on Monday.

As many Montanans struggle to pay their rising property taxes, state lawmakers are exploring revisions to the tax system that could reduce the burden homeowners face.

Members of the Montana Legislature’s interim revenue committee discussed ways to expand Montana’s property tax assistance program, which helps those who live on a fixed or limited income, during their meeting in Helena on Monday. Lawmakers might propose bills that would streamline the application for assistance or that would increase the number of people who qualify for help with their property tax bills.

“I think we’ve reached a tipping point on property taxes,” said Rep. Dave Fern, D-Whitefish, referring to constituents who have had to sell their homes because they can’t keep up with their tax bills. He urged the interim revenue committee to think seriously about proposing legislation on property tax relief in the next session.

In recent years, state lawmakers have drafted bills on property tax relief, but they haven’t passed. During the 2019 session, Sen. Dick Barrett, D-Missoula, introduced a bill that coupled a carbon tax with property tax relief. The bill died in committee.

In testimony before the Legislature, local government officials have said one of the only ways they can continue to pay for essential services is by increasing property taxes. They also have said they can’t increase taxes enough to meet their needs because Montana caps the number of mills local governments can levy for their general funds.

A handful of interim revenue committee members said they would like to draft legislation that addresses the revenue challenge counties and cities face.

Rep. Jim Hamilton, D-Bozeman, said he hears from local officials that there isn’t enough money for them to pay for services and from homeowners that their property taxes are too high. These issues may seem at odds, which is why he said he’d like to see a package of bills that would allow local governments to collect additional taxes, while also creating a property tax relief program.

Some committee members suggested Montana could generate additional revenue by raising the tax rate for people who live elsewhere but who have property in the state.

Park County Commissioner Bill Berg spoke up during Monday’s meeting to explain the effect visitors to Yellowstone National Park have on his constituents. The visitors aren’t taxed as much as local homeowners, but they use the same services, including roads and first responders.

“From boots on the ground in Park County, it’s not getting any easier,” Berg said.

The interim revenue committee will look at income taxes during its next meeting in March. The committee will explore natural resources and sales taxes in May. Over the years, Bozeman’s elected officials have urged the Legislature to pass a sales tax, saying it would help reduce the property tax burden.

The committee’s discussion on Monday was part of Legislative Week, a chance for lawmakers to come together for training and interim committee meetings and to explore whether they would like to change the Legislature’s structure from biennial to annual sessions.

Perrin Stein can be reached at pstein@dailychronicle.com or at 582-2648.

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