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Gianforte Nixes Statewide Sales Tax: Property Tax Task Force Takes Center Stage

Governor Gianforte Stresses Relief for Homeowners

Task Force Formed to Tackle Rising Property Taxes

(PHOTO: Gianforte Nixes Statewide Sales Tax: Property Tax Task Force Takes Center Stage)

According to Roundupweb.com, at the first official gathering of the property tax task force, Montana Governor Greg Gianforte emphasized two key objectives: finding a permanent solution to alleviate homeowners’ tax burden and rejecting a statewide sales tax as a means of achieving this goal.

Montana Governor Greg Gianforte expressed concern about high property taxes in the state emphasizing the need for relief for homeowners. He outlined objectives to control the growth of property taxes and improve transparency in tax calculations. Additionally, he ruled out implementing a statewide sales tax as a potential solution.

Montana Governor Gianforte has formed a 23-member task force to address concerns about rising property taxes in the state. This initiative follows a reappraisal cycle that revealed a notable increase in home prices during the COVID-19 pandemic. A study by Montana Free Press found that residential property taxes had a median increase of 21% this year, primarily due to the surge in home values. In contrast, tax bills decreased for many industrial properties owned by large corporations.

Governor Gianforte has assigned a property tax task force to provide guidance for potential legislative changes during the upcoming session of the Montana Legislature. The task force’s directive is similar to that of the housing task force formed in 2022, which successfully collaborated on legislation to improve long-term housing affordability. During their first public meeting, the property tax task force set out to identify crucial challenges in the tax system after extensive training sessions to ensure a shared understanding among members. They discussed the burdens resulting from industrial closures, complexities of deciphering property tax bills, and local government budgets, following the governor’s opening remarks and his subsequent departure from the meeting.

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Task Force Considers Property Tax Distribution Challenges

Members of a task force underlined the significance of distinguishing between residential properties used as primary residences and those employed as second homes or short-term rentals. Representative Llew Jones stressed the necessity of efficiently targeting relief to homeowners and long-term renters. Furthermore, members deliberated over the difficulty of “squeezing the balloon,” where alleviating taxes for homeowners might redirect the tax burden onto other organizations like farms, stores, or industrial properties unless balanced by alternate sources of revenue.

Rising taxes on properties are being attributed to increased expenditures by local governments, according to Montana’s Governor Gianforte and Republicans in the state’s legislature. This has led to discussions about changing state laws concerning tax collection growth rates. The present limit on tax collection growth, which is based on half the average inflation rate, causes difficulties for local governments when expenses rise at the same rate as inflation. Some of these governments have avoided this cap by funding initiatives through assessments on property that are not considered taxes. During task force discussions, the possibility of replacing property taxes with sales taxes was briefly considered, despite Governor Gianforte’s rejection of a sales tax. Member Sandra Vasecka highlighted potential advantages, including reduced tax burdens for residents and diversification of the state’s revenue streams. Montana’s unique position without a statewide sales tax may contribute to financial stability during economic downturns.

In Montana, discussions are underway regarding the possibility of implementing a sales tax to address financial challenges, although many locals oppose the idea. Due to state regulations, a sales tax of only 4% is permissible, which is insufficient to fully substitute the revenue generated by property taxes. A group tasked with property tax reform aims to present a report to the governor by August 15. Monthly meetings are scheduled to address matters related to education funding, local government finances, and equitable tax policies. More information about these meetings can be found on the official website. This initiative is part of a project supported by Montana Free Press, with funding provided by the Greater Montana Foundation.

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