By now, most folks will attest that the Legislature does not have a clue about the pain caused by high property taxes. On many policy decisions, we’re mired in partisan argument with no appetite for fixes, listening only to lobbyists.
If the Legislature had the will, we could easily impose a fix. I voted against the way Montana mitigated property taxes; it was blatantly obvious that the final bill was bad for a whopping three-quarters of Flathead homeowners.
Folks have asked me why I thought that lakefront homeowners are hopping mad about tax bills. The Legislature added a couple new policy paragraphs to state law that really sting, particularly lakefront homeowners.
Now the homestead exemption, the percent of market value exempt from taxation, only applies to the first $1.5 million dollars of our homes. And the current practice of capping taxes via the extended property tax assistance program now only applies to people living in their home. To add insult to this injury, the Legislature only mitigated 85 percent of reappraisal.
These kinds of policy decisions are new and give us tremendous pause about the will of the Legislature.
Last session, I carried bills which could have capped tax increases to 3 percent. I’ve carried bills to change the valuation system to appraise homes only upon resale. The Montana Association of Realtors, a powerful special interest lobbying group, opposed these policies but supported the current-law approach.
The national recession has hit the Flathead hard and it’s very apparent that home valuations are down big-time. Some are around 2004 levels, according to local experts.
The Legislature should take a very rudimentary step: Immediately suspend the six-year phase-in of new valuations placed on tax bills – a step that would cost the general fund $10 million in fiscal year 2011, but lower taxes for every homeowner and small business.
The next Legislature should also reexamine the past policy and implement the new valuations presented during the interim, which will acknowledge market slippage.
And if you’re pragmatic like me, and want to reform the system, we should look to the examples of states like Michigan, Florida, California, or elsewhere to find good progressive solutions. Tax caps work.
Let’s be real. Some lakefront homeowners are fortunate to have plenty of cash to pay taxes. But many locals do not, and the Legislature must consider the ability to pay when it enacts new tax policy, no matter where our homes are located.
Legislators will talk about solutions on Feb. 18 in Helena and the Legislature meets again next January, maybe sooner given dwindling revenue forecast. Property taxes should not be a partisan issue dominated by special interest lobbyists looking out for their clients.
The people of Montana are kind, generous and good-hearted. But there is one painful lesson I have learned about politics over my short time in Helena. Special interest lobbyists and party politics are rampant.
If homeowners and small business owners favor change in the tax system, you’re going to have to help. Local voices must stand up and overwhelm the paid lobbyist if we truly want reform. Call a legislator, and tell us to get a spine; work for the betterment of our communities and cap taxes given these difficult economic times.
Mike Jopek is a Democratic representative from Whitefish.