Don’t be hoodwinked by property tax initiative

There is little doubt that many Flathead residential property owners are adversely affected by the disproportional impact of property taxes upon average family income wage earners in the county. As the lone elected Democrat in Flathead County, I believe I also share the views of many of my Republican colleagues whom I have spoken to, strongly in opposition CI-121.

This constitutional initiative would implement a California-based law on steroids, mucking up things for many years to come.

There are several portions of the initiative to which I object to.

The constitution should not be overly prescriptive. The initiative is really a statute and like all pieces of our law, someday will require amending to meet societal changes. This initiative locks the state into specifics of tax policy that may prove to be deleterious for future taxpayers, with little recourse because of the high bar to change our constitution.

Specifically, the initiative institutes an artificial mill cap upon the many taxing entities in the state. This includes a wide variety of essential entities such as conservation districts, city, county governments and school districts. There are 169 districts across the state that are currently out of compliance and in excess of the proposed maximum 740.7 mills.

Confused? Entities with high taxable value, beneficiaries of industry or expensive homes creating a high tax base, will need fewer mills to meet budgets of local government or school districts. But many entities are not so fortunate. For example, the incorporated town of East Helena is currently about 200 mills over the proposed C-121 cap.

Recently, the residents in East Helena passed a school bond for a new high school allowing students in the area their own school. This is local control in action and I believe such governance best captures the will of the people. Local mills also cover the expenses of essential services such as emergency services and law enforcement. How will East Helena and 168 other entities resolve such a conundrum?

CI-121 only includes residential property taxes. The omission of such classifications as business and agricultural property invites the opportunity for tax shifts resulting in a disproportional amount of tax burden being picked up by non-residential tax payers. No wonder why both the Montana Farm Bureau and Montana Chamber opposes the initiative. An acquisitional property tax appraisal with an accurate inflationary increase minus mill caps might make sense for Montana.

With income tax and business equipment tax reductions as a stated priority of the governor’s office last session, there was not the political will or fiscal capability to address property tax reform. Property tax bills before the Legislature failed to pass.

CI-121 will hopefully attract the needed attention from reluctant law makers who may be insensitive to the burden many homeowners face.

There are other methods to reduce the residential property burden upon residents, including the expansion of a program like the elderly homeowner tax credit, state takeover over education levies up to 101 mills, and a system of tax circuit breakers that provide refunds to working Montanan’s with property taxes that challenge their take home pay. Simply said, we are overly dependent upon the property tax for essential services including city, county and school districts. The obvious reason being, we have no general sales tax and for better or worse we limit options to fund a large diverse and under populated state.

Don’t be hoodwinked by something that seems too good to be true. I ask you to think carefully and ask questions before signing on to CI121.

Rep. Dave Fern, D-Whitefish, is vice chair of the House Taxation Committee.