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Senate bill 32 prompts debate over who benefits as sponsors and cities clash over targeting of property-tax relief
Summary
SB32 would adjust taxable-value rates to shift property-tax burdens, giving owner-occupied homes a lower rate while raising rates on some rental/commercial classes; proponents say it offers broad relief and lower utility rates, while cities and policy groups warn it's costly, untargeted and could reduce local revenue for services.
Senator Jeremy Trebis presented Senate Bill 32 as a large, budget-impacting property-tax adjustment that lowers taxable-value rates for primary residences and reduces rates for utilities, while raising assessed rates on some rental and non-owner-occupied properties. Trebis contrasted SB32 with a competing House Bill (231), arguing SB32 is simpler and would produce comparable statewide revenue changes while shifting relief toward homeowners and utility ratepayers.
Trebis and his handout showed a multi-year fiscal comparison with House Bill 231, and he emphasized projected taxpayer relief for owner-occupied homes and an intended pass-through decrease for utility ratepayers. "Owner occupied homes get a break and utility rate payers get a break," Trebis said, noting distributional effects that will produce significant revenue shifts across fund accounts.
Opponents, including Heather O'Loughlin of the Montana Budget and Policy Center and Jennifer Olson of the Montana League of Cities and Towns, urged the committee to consider where revenue losses fall: they argued SB32's flat rate change benefits very high-value property owners disproportionately and undermines local governments' budgeting flexibility, potentially affecting services like police and fire. Missoula's city representative warned the inflation cap combined with loss of floating mills could leave growing cities unable to meet increased service demand.
Department of Revenue staff and legislative fiscal staff were present to answer technical questions on K-12 funding, FTE impacts and the bill's long-term effect on local-authority revenue. The sponsor noted SB32 allows full inflation indexing and that in the long run jurisdictions could recapture more revenue via inflation-driven mills, but opponents cautioned about short-term impacts and local budget uncertainty.
The committee closed the hearing after extensive questioning; the bill remains contested over targeting, long-term costs and local-government effects.
