Legislative Update: Representative Marta Bertoglio: Property Taxes

When I opened my Department of Revenue (DOR) appraisal notice I, like many of you, was shocked by the increase in my property tax estimate. Even though I read on the first page,

“THIS IS NOT YOUR PROPERTY TAX BILL”, I was still concerned. I understand the angst and confusion regarding this process because property owners question the accuracy of the fair market value and secondly the possible increase in their property taxes. Please remember that property taxes are local. This means that local services including law enforcement, schools, fire departments, and such are paid with property taxes.

By law, the Montana DOR is required to appraise all properties on a two-year cycle. The department generally uses comparable sales to determine the fair market value within six months of the appraisal date. As we know, there has been a sharp increase in the purchase price of our Montana properties. This does not mean, however, that your property tax bill will increase at that same rate. Many factors play a part in your property tax assessment. The tax base (residential, agriculture, and commercial property values in the area) multiplied by the tax rate (set by the Legislature for each class) results in a taxable value. If you look at your tax bill, you’ll see items expressed in “mills”. Mills are expressed as dollars owed per thousand dollars of taxable value. Mills are calculated by taking a tax jurisdiction like a school district divided by the total tax base multiplied by 1000 (mill factor). I read a great explanation of property taxes in the Montana Free Press (https://montanafreepress.org/2023/06/22/property-taxes-explained-with-pictures/). It was the best I’ve seen thus far.

What did the 68th Legislature do to help you with your bottom line? We passed property tax and income tax rebates that will put money back into your pockets. We also passed HB 587 which inserts revenue directly into local government to help pay for our local public servants’ retirement. This will lower the number of mills that the local government will need to assess to cover those costs.

Montana law puts a cap on the growth of property tax revenue and requires a vote to exceed that growth limit, thereby protecting our taxpayers. In order to reduce taxes, expenditures must decrease. What can you do to control your property taxes? Stay informed, go to meetings, and vote!

The process for calculating your property taxes still has a few steps to go until your actual tax bill arrives. The schools will set their budgets in August, and then your local officials will arrive at an overall budget in September and assess the mills.

Some proposals brought forward last session resulted in a tax shift, and therefore failed. If we reduce one group’s taxes the tax burden shifts to another group. What are your tax solution ideas that will ensure we continue to pay for our schools and local services? I am interested in long-term solutions, so please send your ideas to me at marta.bertoglio@legmt.gov.