Flathead County homeowners can expect new property value assessments in the mail in coming weeks with a majority of residences facing property tax increases.
The new property tax numbers are part of the state reappraisal process put in place by the 2009 Legislature. Reappraisal must happen every six years, according to the Montana Constitution, with the assumption that property values have increased. Property taxes, then, are based on the reappraisal numbers.
According to recent numbers from the Revenue Department, 28,646 homeowners in Flathead County, or nearly 92 percent, will see their yearly payments hike or drop within $200. Of that group, 21,422 residence should see up to $200 added to their payments; the remaining 7,224 should see up to $200 taken off their property taxes.
The department’s data show 2,665 homeowners whose payments are expected to increase by more than $200, and 38 residents can expect to add more than $1,000 to their property taxes. Only five residences fall in the highest bracket, tacking on more than $2,000 annually.
On the flip side, 321 homeowners should see their payments decrease by more than $200, with 47 losing over $1,000 off their payment. Five residences should have $2,000 or more taken off their property taxes.
Property values across Montana went up 55 percent on average in the last six years, but the values in Flathead County went up 73 percent. With an above-state-average increase, officials at the Revenue Department say local mill levies should go down to balance out the state’s increased tax revenue. This means the projected property tax increases might not be as high as expected, depending on local mill levels.
Despite the number of county homeowners expecting higher property value assessments, Sen. Bruce Tutvedt, R-Kalispell, said he is pleased with the outcome of the reappraisal legislation.
“I believe it was the best bill we could have had,” Tutvedt said. “It’s flat and it’s fair.”
Tutvedt said the legislation was designed to mitigate the property value increases, so the state will not see a huge increase in property tax revenue. The higher property values will be phased in over six years, along with a phased in drop in the tax rate to maintain revenue neutrality.
But state Rep. Mike Jopek, D-Whitefish, said he is concerned the reappraisal will put a disproportionate financial burden on Flathead County compared to other counties because of its high property values, and the state will actually get millions of dollars in the bank from higher property taxes.
“When I think about all the good things that happened in 2009, (reappraisal) was a failure,” Jopek said. “I think the Legislature failed the homeowners of Montana.”
According to Jopek, the House of Representatives version of the reappraisal bill was set to fully mitigate the reappraisal so the state would not get a financial windfall from higher property taxes. But Jopek said Senate Republicans changed the bill, putting millions in the state coffers.
Tutvedt asserted that the overflow was the result of a rounding error in the legislation and lawmakers decided to keep the money in the state’s general fund since they could not agree on a different arrangement.
“It was our goal to be revenue neutral,” Tutvedt said. He added that attempts to cancel out the extra millions were rejected by lawmakers.
Both Jopek and Tutvedt said homeowners should make sure their new property value assessments are correct and urged residents with questions or concerns to visit the local Revenue Department office for an informal review.
Scott Williams, at the Kalispell branch of the Revenue Department, said he suspects most Flathead County landowners have a good idea how much their land is worth because many have tried to sell, recently purchased land or refinanced their property.
Williams also stressed that the Revenue Department did not base the new property value numbers on the housing market peak in 2007. He said the department used housing market numbers through June 2008 before determining new assessments to account for the downturn.
However, Jopek said the new assessments would still be based on inflated market numbers despite attempts to flatten them out and Flathead County will be hit hard with higher property taxes.
“I think it’s bad news given the economic downturns we are currently facing,” Jopek said.
Tutvedt said using the June 2008 numbers was the best the Revenue Department could do under the circumstances.
“It would be really nice if the appraisal date was June 2009, but that was not possible,” Tutvedt said.
Revenue Department officials encourage homeowners with questions or concerns about their assessments to set up an informal review with the department to go over the new values, which can be followed up with an appeals process. Homeowners have 30 days upon receiving their assessment to do so.
The Kalispell office is located at 100 Financial Drive, Suite 210, and can be reached at 406-758-5700.