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House Bill 154 would use income‑tax credits to cap housing tax burdens for owners and renters
Summary
House Bill 154 would create a targeted, refundable income‑tax credit that scales with household income and property‑tax (or rent‑equivalent) payments; backers said it is the most targeted tool for affordability and would include renters, while opponents cautioned about fiscal cost and the use of income‑tax credits to address property taxes.
Representative Jonathan Karlen presented House Bill 154 as a housing‑fairness income‑tax credit intended to cap property‑tax burdens relative to household income and to include renters using a 15% rent‑equivalent calculation. Karlen described worked examples in which a median‑income household (about $69,000) with a $4,000 property tax bill would receive approximately a $1,100 credit (about 27% of their bill), and lower‑income or fixed‑income households would receive larger proportional relief.
Supporters included policy organizations and housing advocates (Montana Budget & Policy Center, MUST, Shelter Whitefish), AARP, the Montana Nonprofit Association and others. They argued the credit would target those paying high effective property‑tax rates, include renters who otherwise receive no direct property‑tax relief, and help workers and older adults remain in place. Testimony emphasized that 29 states plus D.C. already use similar credits of varying designs.
Opponents included the Montana Society of CPAs, which said it generally opposes tax credits and prefers property‑tax solutions. Department of Revenue staff provided fiscal and implementation context: DOR witnesses noted the fiscal‑note estimate in discussion (committee members referenced roughly $100 million), and DOR explained the potential need for additional staff to handle a high volume of claims and the documentation needed for refundable credits.
Committee members asked whether the credit would effectively subsidize local governments and whether it could create incentives for higher local levies. Sponsor and proponents said the credit does not provide revenue to local governments, does not change local budget caps, and is targeted to households most affected by property‑tax increases; proponents cited studies suggesting targeted credits generally do not drive higher levies.
Representative Karlen closed by noting prior state rebates came from general‑fund income tax revenue and urging the committee to consider this targeted, income‑adjusted approach. The committee took no action and closed the HB154 hearing.
