Governor Brian Schweitzer said Thursday he’ll propose a bill in 2009 to ensure no statewide property tax increase occurs because of the ongoing reappraisal of residential, commercial, agricultural and timberland property.
Schweitzer’s a
nnounced legislation is the same policy previous Montana governors and Legislatures have used in six of the past seven multiyear property reappraisal cycles since the 1970s.
“We will propose legislation to make sure that, on a statewide basis, homeowners, commercial property owners and farmers and ranchers don’t see taxes increase due to reappraisal,” Schweitzer said in a press release.
Schweitzer’s pledge does not mean taxes on all individual parcels of property will remain the same after reappraisal. Rather, it means the total money collected by state and local governments from property taxes will remain about the same after the new reappraisal as it is now.
Taxes on some properties in Montana will go up to reflect their rising market values, just as taxes on other parcels will drop to reflect their falling values.
Previous governors and Legislatures have used two methods to neutralize statewide property tax changes after values change during reappraisal.
First, they have lowered the rate or “multiplier” that determines what percentage of property is subject to taxation. Over the years, the rate for homeowners and commercial real estate has dropped from 12 percent in 1977 to 3.01 percent next year.
Second, they have increased the amount of a property that is exempted entirely from taxation, known as a “homestead exemption” for residential property, or as “comstead” exemption for commercial property.
Randy Wilke, who heads the Property Assessment Division, said he expects the agency will have new reappraised property values ready by mid-October 2008.
The 1972 Montana Constitution requires the state to “appraise, assess and equalize the valuation of all property.” About every six years, the Revenue Department establishes and equalizes values for property for agricultural, residential and commercial property and timberlands.
