An effort is underway to revive and expand a wide-reaching cap on property taxes that failed to reach voters in 2022. The latest proposal has been stalled by the attorney general.
Attorney General Austin Knudsen blocked the proposal from a Bozeman attorney and former state legislator to cap property taxes through a constitutional amendment. A similar initiative failed to gain enough signatures to appear on the 2022 ballot.
The state’s top attorney said the latest proposal doesn’t pass legal muster to even start gathering those signatures. In a statement, a spokesperson for Knudsen said the proposal is ambiguous and addresses two constitutional issues that require two separate initiatives.
But attorney Matthew Monforton said that assessment is wrong and that Knudsen has overstepped his authority by blocking the initiative.
“For the attorney general to now try to disqualify a virtually identical initiative smacks of politics and inappropriate influence on the attorney general’s office,” Monforton said.
The revived proposal uses nearly identical language as the 2022 initiative, but would cap taxes on all property instead of just residential property.
The 2021 proposal faced an outside legal challenge that temporarily halted signature gathering. That lawsuit argued that Knudsen and the Montana secretary of state failed to follow a 2021 law requiring that they assess ballot initiatives for potential harms to business. If harms are likely, a warning is required to appear on the ballot with the initiative.
Knudsen countered that he performed his due diligence in reviewing the initiative. A district court judge agreed, and allowed the initiative to move forward, although it ultimately failed to garner enough signatures to make it on the ballot.
Opponents, including the Montana Association of Realtors, Montana Federation of Public Employees, Montana Chamber of Commerce and Montana Farm Bureau Federation, organized an opposition campaign, saying it would be detrimental to local government budgets. Proponents said it would alleviate a high property tax burden for Montanans.
In 2021, Knudsen determined that the property tax initiative met the state’s legal standards, but said the latest version is unconstitutional. He also included a fiscal analysis that shows it would result in the state losing $460 million in tax revenue its first year in effect.
Monforton filed suit with the Montana Supreme Court, which has ordered the attorney general to respond in the next month.
