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Sponsor pitches broad property-tax rate reductions to neutralize 2023 and 2025 reappraisals; critics warn of shifts and big general-fund cost
Summary
House Bill 528 would lower selected class tax rates to offset increases from 2023 and the expected 2025 reappraisal; proponents say it restores revenue neutrality for homeowners, while opponents caution the change shifts costs across classes and creates large general-fund implications for school guaranteed tax base payments.
Representative Ed Byrne (House District 11) presented House Bill 528, a proposal to reduce class tax rates for residential, agricultural and commercial property to blunt the tax impact of recent and projected reappraisals.
Supporters told the House Appropriations Committee the bill is a straightforward reversal of two recent reappraisal-driven increases: they said the 2023 reappraisal raised statewide values and that the bill would reduce residential and agricultural multipliers and residential rates to bring property-tax liability closer to pre-reappraisal levels. Proponents said the bill requires no application by homeowners and no new FTE.
Proponents pointed to Department of Revenue estimates showing that combined taxable-value increases from the 2023 reappraisal and the expected 2025 reappraisal would raise about $160 million in state collections per year (witnesses described a combined taxable-value increase of roughly $1.6 billion and estimated the state's 101 mills would collect about $160 million). Proponents argued the bill restores revenue neutrality to these reappraisals.
Opponents, including the Montana Taxpayers Association and the Montana Budget and Policy Center, said the bill would produce large general-fund costs because school funding formulas (the guaranteed tax base) shift the effects of taxable-value changes into the general fund. The Departments of Revenue witnesses provided county-level impact tables that showed the taxable-value reductions and resulting mill adjustments, and they noted the bill could create sharp disparities across property classes because multipliers for other classes would remain higher.
At the hearing, Department of Revenue economists explained the mechanics: lowering residential taxable value requires mill-rate increases elsewhere to meet fixed levies, prompting guaranteed-tax-base recalculations that increase general-fund obligations. DOR staff characterized the bill as fiscally disruptive: one DOR witness rated the bill a low-to-medium grade for soundness because it would substantially change the distribution of property taxes.
The committee heard pro and con testimony and DOR analysis; the sponsor urged the bill be advanced. No committee vote was recorded in the provided transcript.
