One of the top three concerns, and most often the No. 1 concern of Montana property owners, is the crushing impact that onerous property taxes are having on them. However, it’s time for a few lessons about property taxes, and where and why they are growing. I’m using Missoula City and County as an illustration, but the increases around Montana are very similar to Missoula and are well above the often stated growth levels of “inflation and population growth.”
Fact No. 1: The state of Montana is only responsible for about 15% of your property tax impact. Cities and counties are responsible for the remaining 85%.
Fact No. 2: In 2001, the City of Missoula collected $13.4 million in property taxes. In 2020, 20 years later, that collection amount had grown to more than $36.4 million. That’s about a 5.4% annual growth rate, far above the Consumer Price Index (CPI) and our population growth during that period.
Fact No. 3: In 2001, the County of Missoula collected about $24 million in property taxes. In 2020, 20 years later, that collection amount had grown to more than $69.2 million. That’s about a 5.7% annual growth rate, again far above the Consumer Price Index (CPI) and our population growth. For comparison, the most populous county in Montana, Yellowstone, had total tax revenues in 2020 of $58.5 million, about $11 million, or 16%, less than Missoula County.
Obviously, voters around the state are increasing their own property tax burden when they vote for bonds on parks, trails, open spaces, libraries, converting private property to public (further raising the tax burden on the remaining private property owners), and other taxes imposed by the will of voters. Clearly, non-property owners make up a large portion of those who vote to increase property taxes. During the past 20 years, and before, city and county governments haven’t made these facts known to property owners. If they were asked, they usually said something like: “taxes are only increasing by the CPI and population growth.” If that had been the case, city and county tax revenues would almost certainly be millions of dollars lower, leaving that money in your pocket. In other words, you’ve been duped by the elected members of city and county government, while they make the ability to live in Montana more and more unaffordable.
This session, the Montana Legislature is cutting both your property taxes and income taxes, but our ability is mostly limited to income tax reduction. While the reductions being proposed in income and property taxes are not as large as I would have preferred, it’s a start and I believe the Montana Comeback plan being implemented by the conservatives in the Republican Party will grow our economy and lead to further reductions in both taxes.
Fiscal conservatives will continue to fight to reduce your property taxes. However, it’s imperative that you realize that the true cause of your rapidly increasing property tax burden is the excessive growth in city and county government. Each voter has the ability to control property taxes by electing fiscal conservatives who will limit government growth and hold government to their basic duties – police and fire protection/education/protection of natural resources/necessary infrastructure.