Proposal would replace district base levy with county-level levy to reduce property-tax disparity

Representative David Beatty opened the House Education Committee hearing on House Bill 156 by saying the bill would replace nonvoted district-level general fund base levies with a county-level mill levy intended to reduce disparities in property-tax burden across school taxing jurisdictions.

"The simple summary of it is that it replaces the current non voted school district general fund base levy... with a county level mill or levy to fill that base area," Beatty said, noting the change would not alter the funding formula's calculation of district need but would change how the base levy is collected and distributed.

Supporters said the change would narrow the disparity in taxable value per pupil across Montana taxing jurisdictions and reduce mills for a majority of taxing jurisdictions. Lance Melton of the Montana School Boards Association, who served on the property tax task force education subcommittee, said roughly 80% of taxing jurisdictions would see a decrease in mills under the proposal and that the state’s guaranteed tax base (GTB) aid — currently about $280 million, he said — could be distributed more effectively at a county level. Melton offered modeling figures: an average mill decrease among winners of about 7.53 mills and a median decrease of about 4.9 mills; the sponsor said earlier modeling estimated a median reduction of roughly 2 mills for most jurisdictions.

Ryan Evans, assistant budget director in the governor's budget office, said the bill matches the conceptual recommendation of the governor's property-tax task force and supported the proposal for increased equalization and simplification.

Opponents urged caution. Bob Story, representing the Montana Taxpayers Association, said the change is premature and should be considered as part of the full decennial study; he also said the bill could shift tax burdens between districts and that the merits should be tested during the study process. Other opponents said the property-tax task force process had limited public input and that moving to a county levy would not address all equity concerns.

Legislative Fiscal Division staff told the committee they prepared charts showing current base mill distributions by taxing jurisdiction and modeled distributions by county under the bill; Julia Patton said she can provide county-by-county spreadsheets to the committee and scheduled another data presentation for a subsequent meeting. Committee members requested that staff return with county-level detail to show how the change would affect particular districts and taxpayers.

Beatty and others noted the change would also simplify aspects of last year's House Bill 203 (public school choice), which required tuition payments between districts under some student transfers; Beatty said replacing district base levies with a county levy would remove the need for some inter-district payments tied to base levies.

The committee closed the HB 156 hearing without a vote and requested more detailed fiscal modeling and county-level breakdowns before further action.