Senate hearing on SB225 proposes renter tax credit to ease rising housing costs

Senator Morgell, sponsor of Senate Bill 225, told the Montana Senate Taxation Committee the measure aims to give renters relief from rising property-tax-driven housing costs by creating a refundable renter tax credit for lower-income households. "This bill really came from a place where... how do you help people with property taxes in Montana as they continue to rise across the state," Morgell said, asking the committee to consider a modest, time-limited credit that would not duplicate existing homeowner credits.

The bill would limit eligibility to households earning less than $45,000 a year and to individuals under age 62; Morgell described a sliding credit scale in the draft, with illustrative credit rates (for example, 40% for gross household income between $35,000 and $37,500 and 30% for $37,500–$40,000). The sponsor said the fiscal note estimates roughly $13,000,000 in annual cost and that the measure includes a sunset provision to allow the Legislature to evaluate its effects.

Proponents included Hope Morrison, representing the Associated Students of the University of Mon, who said students often face a choice between paying rent and continuing their education. "By providing relief on housing costs, students would face less financial stress," Morrison testified, saying 65.2% of students find housing unaffordable in some markets.

Dean Bear Claw of Western Native Voices in Billings testified in support on behalf of an absent colleague, saying the credit would promote fairness between renters and homeowners and help reduce housing instability. "We believe this legislation is a crucial step toward promoting economic equality and supporting them," Bear Claw said.

Committee members questioned technical and administrative details. Mr. Cole, the fiscal-note drafter, said the estimate uses census-derived rent and income distributions and accounts for existing exclusions (for example, elderly participants in a separate homeowner credit were scaled down in assumptions). "Because the numbers I were accessing were just about renters and percent of income paid as rent... I reduced all the counts by about 21% to account for those that are elderly," Mr. Cole said, and added that the program as drafted would touch renters only.

Shailene Daigle, unit manager at the Department of Revenue, answered administration questions about interactions with rental subsidy programs. "It depends... we would deduct part of that out for voucher programs in a sense," Daigle told the committee, explaining how voucher or tax‑exempt housing could affect an applicant's eligible rent for the credit.

Members asked about the fiscal note assumptions, including the use of low rent figures in census data (some scenarios in the fiscal note use $500 monthly rents for certain households). Senator Heyman and others questioned whether that level reflects current rents in urban areas such as Missoula. Mr. Cole and other witnesses said census figures show some very low-rent households in rural and multi-occupant households, and changing those assumptions would materially alter cost estimates.

Committee discussion also covered administrative staffing: the fiscal note assumes four full-time equivalent positions to administer the credit, a number some senators compared with staff levels for the existing elderly homeowner credit. The sponsor said the credit amount and lower incidence of fraud were reasons the administration asked for fewer staff than for the homeowner program.

Senator Morgell closed by reiterating the bill's aim to provide partial relief to renters while limiting program scope through income caps and the sunset, and the committee closed the hearing without a committee decision that day.

Ending: The committee did not take a vote on SB225 at the hearing. Staff and members requested follow-up information on Section 8 voucher availability and vacancy rates in specific communities; sponsors and fiscal staff said they would provide or seek those details before further action.