The headline policy developed in Gov. Greg Gianforte’s property tax task force was voted down Wednesday.
Republican Sen. Greg Hertz, chair of the Senate Taxation Committee, said he liked House Bill 231 initially, but it’s now too complicated.
“I'm afraid this particular bill is getting to look too much like Frankenstein.”
The so-called homestead exemption would lower levies for primary Montana residences and small businesses while raising taxes for second homes and short-term rentals.
It involves a complex formula that decides who pays more and who pays less – without changing the amount collected. That amount is largely driven by local governments, plus a tax the state collects for public education.
At a press conference Thursday, Gianforte said he’s disappointed and wants to see the proposal revived.
“All of us in elected office have been given a mandate by the people of Montana to implement permanent property tax relief in this session.”
The Senate committee voted against the bill 5-3. It also voted down Gianforte’s proposed income tax cut.
That bill would cut the state’s top marginal income tax rate by one percent, which includes most workers. Gianforte says that’s most fair to taxpayers. Opponents say the bill will cost too much.
But there’s bipartisan support for a different measure that would cut income taxes for middle- to low-income Montanans, carried by Republican Sen. Mike Yakawich. It’s advanced to the House.
There are several other proposals to lower property and income taxes still alive at the state Legislature.
The Senate also endorsed two “backup” bills that would offer tax rebates and freeze property tax values for the next two years in the event that lawmakers can’t find consensus on a permanent solution.
