Committee hears bill to set voted levies in dollars and cap annual growth at 75% of inflation

The Senate Tax Committee on a 2025 legislative-session hearing considered House Bill 20, a proposal from Representative Larry Brewster of Billings to require voter-approved levies for special districts to be expressed as specific dollar amounts rather than mills and to cap annual increases at three-quarters of the three-year average rate of inflation.

Representative Larry Brewster, sponsor of the measure, told the committee the bill would extend the same dollar-based voting framework now used by many counties and cities to “special districts and the other revenues that they have that they vote.” He said the measure would require ballot language to include a specific purpose and amount and whether the levy is permanent. “This is a great bill,” Brewster said, and he described the proposal as an “old practice” intended to moderate swings caused by rapid changes in assessed values.

The bill would exclude school levies from the change and would allow special-district levies to increase annually up to three-quarters of the three-year average rate of inflation under the statutory framework referenced in the hearing (transcribed as 15-10-4-20 and 15-10-4-25).

Opponents — including municipal and county officials and the Montana League of Cities and Towns — said the change would create problems for operational levies that fund ongoing services such as police and fire. Kelly Lynch, executive director of the Montana League of Cities and Towns, told the committee the association was willing to switch to dollar-based voted levies but only if the bill allowed “full inflation.” “Without those changes, we stand in opposition to this bill,” Lynch said, arguing that CPI and other measures of inflation often do not match the cost drivers for local services.

City representatives gave concrete examples of impacts they said the bill would cause. Danielle Bradley, speaking for the city of Great Falls, said a hypothetical public-safety levy that funded 10 firefighters could force layoffs after a few years because the fixed-dollar levy would not rise fast enough with operating costs; she said, “we would have to tell the voters that an approved levy is a short term solution” and urged a no vote. Jennifer Hensley, representing Missoula County, said a dollar amount approved by voters in 2006 for $995,000 had eroded to the equivalent of $557,000 because of inflation and rising costs, illustrating the problem of fixed-dollar levies in growing-cost environments.

Department of Revenue staff witness Dylan Cole described public confusion about the difference between fee-based special-improvement districts (for sidewalks or lighting) and mill-based voted levies. “People play a little fast and loose with the term special district,” Cole said, and he explained that HB 20 would change how new mill-based levies appear on ballots by requiring dollar amounts that automatically lower the mill rate if assessed values rise.

Committee members pressed the sponsor on possible amendments. Senator Dunwell asked whether Brewster would accept changing the three-quarters cap to full inflation; Brewster said he would consider it but described the three-quarters figure as a compromise reached in the House to secure bipartisan support. Senators asked about unintended consequences, including whether local governments would repeatedly return to voters for levy increases; Brewster said more frequent voter engagement was a feature, not a flaw, because it would force officials to justify spending.

There was no committee vote at the hearing. The bill drew opposition from several cities and counties that asked the committee to allow full inflation if levies are converted to fixed-dollar votes, and proponents argued the measure would protect taxpayers from large swings tied to sudden reappraisals.

The hearing on House Bill 20 was closed with no formal action recorded; committee staff and members indicated further work and possible amendments could follow.