Montana Decides: If It Moves (or Doesn't), Tax It

Most of you recall the famous quote from Ronald Reagan, “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Yes, that means real property as well, which tends to not move but is taxed to help cover the costs of running schools and local governments.

My last article, “When You Find Yourself In a Hole Stop Digging” which is still available at

http://www.montanadecides.substack.com if you have not read it, raised awareness of a potential spending issue for the county. This article will touch on the revenue side of the financial statement specifically the property tax.

It seems there’s a growing concern and question on everyone’s minds which is “why do property taxes keep going up?” According to the Montana Taxpayers Association, http://www.montax.org, the major cause of property tax increases are levies or construction bonds passed by the voters. In 1999, a new tax limitation statute was enacted, MCA 15-10-420, which was designed to protect property owners from non-voter-approved property tax increases. However, the statute was amended in 2001 to allow for some revenue increases including allowing governments to increase taxes to fund increased costs for medical insurance for public officers and employees without a vote of the people. All other property tax increases still need to be approved by the voters during an election.

In examining mine and my wife’s most recent property tax bill, I calculated that 49% of our payment went towards funding public education at the county and state levels. Referencing the Montana Taxpayers Association once again, school budgets can only increase in one of two ways, or both. They increase either by a portion of the inflationary adjustment to school budgets allowed by the State and/or by growth in student enrollment. However, because the State only funds about half of a school’s budget, the remainder of those inflationary spending increases are funded by raising local property taxes.

What do property taxes represent in the grand taxation picture? According to new consumer spending data from the Bureau of Labor Statistics, each taxpayer paid on average more than $16,000 in taxes last year which outpaced the average spent on food, clothing, education, and health care combined. The mean for total spending on health care, food, education, and clothing was $16,721 versus the mean for total spending on taxes which was $16,729. Property taxes made up only $2,474 or 15%.

In summary, your property tax increases are driven by a couple of major reasons. The largest contributor is voted upon levies. When we approve a bond issue, mill levy increase, or creation of a new taxing authority our property taxes will go up. A close second to voter-approved increases are inflationary adjustments to local government and school budgets which we pay all or a portion of these increases. The third is medical insurance cost increases for local governments that are passed through to us taxpayers. This is not an exhausted list of reasons why property taxes are going up but they are major factors worth highlighting. Ironically, property tax increases on homes due in November of 2022 will not be because of increased values. That will be an issue in 2023.

Following the primary election this past June when I failed to receive enough votes to move on to the general election for the upcoming vacant county commissioner seat, I mentioned in a “What’s Next” article that I wanted to find a way to continue helping the residents of our county by sharing what I continue to learn from Jefferson County’s annual financial report and local economic status. The subjects that I choose in these articles only skim the surface but all deserve to be dove into headfirst.

There are many rabbit holes, and they are deep. I am grateful that I can bring this information to you through our local newspapers but because the outreach is limited, I need you to engage with these articles at https://montanadecides.substack.com. Leave a comment and tell me what is important to you.That helps direct me going forward with what rabbit holes to choose for deeper exploration.