Whitefish residents push for tax-relief legislation

A gaggle of Whitefish Lake residents convened in the Montana State Capitol Friday to advocate for legislation that would ease property taxes on some state homeowners with skyrocketing land values.

Sen. Keith Regier, R-Kalispell, is sponsoring Senate Bill 94, a tax-relief measure that would apply only to primary residences where the appraised land value is more than 75 percent of the value of the home and other improvements on the property. That land value would then be capped at 75 percent of the value of the other improvements.

However, if that calculation were to cause the taxable land value to drop below the statewide average per acre, the taxable value would be set at the average.

Rep. Dave Fern, D-Whitefish, is co-sponsoring the bill and spoke in favor of it before the tax committee. He was joined by more than a half-dozen Whitefish Lake residents who shared similar stories: They had bought or inherited modest homes along the lake decades earlier, only to see the appraised value of the land itself escalate with the influx of wealthy neighbors and second-home mansions that have left them unable to cover the rise in property taxes.

Linda McCarthy said she began paying taxes on her father’s house in 1999, aiming to keep it in the family after he purchased it in the 1950s.

A widow living on a fixed income, she said she now cares for her father at the house, but they’ve been forced to begin packing up and renting the property out to vacationers each summer to make ends meet.

McCarthy said the last two-decades’ spike in land values around the lake “has been emotionally very disappointing, not to be able to enjoy the beautiful summers in the home and life we planned.”

She added, “Many of my neighbors have already been forced to sell and leave. I don’t want to join them.”

Retired forest-products salesman Bruce Tate, also lives on the scenic lake, where he said he built a modest, 1,500-square-foot house in the ‘70s. His tax bill has quadrupled in the years since, he said.

“It’s not a mega-mansion, but it’s home and we love it,” Tate said. “There’s not a day goes by that we don’t sit in the living room and say, ‘Aren’t we lucky to live here?’”

Noting that he’s the “last Whitefish native” on the stretch of shore between the river and the state park, he added, “That’s what’s happened to Whitefish. We’ve got people from Canada, from all over, that own properties up and down there.”

Although the initial estimate from the Department of Revenue indicated that the bill would wind up costing the state more than $2 million per year in lost revenues, department director Mike Kadas told the Senate Taxation Committee that a mistake had roughly doubled the projected cost of implementing the legislation.

“Last night I learned that we had made an error in the [fiscal] note,” Kadas said. “I can’t tell you how much ... but I think it will be in the neighborhood of half the impact that you’re seeing today.”

That said, the revenue director still spoke in opposition to the bill, arguing that even the reduced cost of the proposed tax breaks were cut too deep into an already cash-strapped state budget.

The hearing also elicited a mixed response from the tax panel. Sen. Dick Barrett, D-Missoula, one of the committee’s vice chairs, suggested the tax relief would be “highly selective” and would not extend to enough homeowners throughout the state who are struggling under the rise in land values.

He added that two existing state programs to relieve property taxes on lower-income residents are granted on an income basis. Asked whether he would support such an amendment, Regier responded that it would depend on the proposed language.

Reporter Sam Wilson can be reached at 758-4407 or by email at swilson@dailyinterlake.com.