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Updates on Legislative Proposals for Property Tax Relief

Update, January 20

Despite yesterday’s miscommunication between Republicans on the House Taxation Committee and the Governor’s Office on Governor Gianforte’s proposal to provide a $1,000 yearly property tax credit for homeowners over the next two years, the committee was able to move the bill forward today. However, it was amended to reduce the credit to only $500 per year. The bill now moves from the Taxation Committee to the Appropriations Committee. 

Contrast this with a bill Rep. Emma Kerr-Carpenter (D-Billings) introduced today that will increase the Earned Income Tax Credit (EITC) for working Montanans. 

HB 285: Increase the earned income tax credit and link with inflation increases Montana’s EITC from 3% to 60% of the federal earned income. The bill also calls for the tax credit to rise as the cost of living does, to ensure that families’ tax cuts don’t get eaten away by inflation.

As Rep. Kerr-Carpenter said in a release announcing the legislation: “It is in Montana’s interest that everyone has the freedom to thrive. By expanding EITC, we can help thousands of households keep up with the increasing costs of living.” 

Previously:

Republicans in Disarray, Property Tax Edition: 

Yesterday Governor Greg Gianforte’s proposals to spend the state’s $2 billion budget surplus, were heard by various committees in both the House and the Senate. The proposals include lowering the state’s income tax from 6.5% to 5.9% (which would save top income earner $6,000 a year and lower income earners less than $38) and expanding the earned income tax credit from 3% of a person’s income to 10%. 

However, today one proposal from the Governor was tabled by the House Taxation Committee. HB 222, sponsored by Rep. Tom Welch (R-Dillon) would spend $500 million in surplus funds to provide Montana homeowners up to $1,000 in property tax rebates for the next two years.

The Gianforte administration might have expected such a bill to easily sail through committee and onto the House floor, but were caught flat footed when House Majority Leader Sue Vinton (R-Billings) made a motion to table the bill, which passed easily 14-7. 

In a statement after the vote, a spokesman for the Governor said “the governor is shocked legislators decided to stall providing Montanans with property tax relief.” 

Explaining her motion, Vinton eargued that HB 222 was a large, complex bill and that the committee needed more time to review it before taking action. 

The bill is apparently so complex she forgot to tell the Governor how complex it is. 

Karlen Files Two Bills to Provide Property Tax Relief: 

While most press coverage has been on Governor Gianforte’s tax cuts for the wealthy and the accompanying Republican disarray, Montana Democrats have been busy filing legislation to provide real property tax relief. 

Rep. Jonathan Karlen (D-Missoula) has filed two bills HB 258 and HB 280 and provides tax relief to renters as well as low and middle income Montanans. 

HB 258 provides a one-time property tax refund for Montana-resident homeowners and renters with income less than 130% of county area median income. HB 280 provides long-term property tax relief and ensures that working Montanans who have been surprised by sky-high property taxes are not penalized by the increased value of their home. 

Rep. Karlen’s long-term tax relief plan would ensure that Montanans receive a refund when their property taxes rise above a certain percentage of their income. It protects Montanans from high tax bills, while also defending sources of critical funding for schools, firefighters and police. 

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