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Bill proposing county-level base levy draws debate over tax equity and distribution
Summary
House Bill 156 would replace district-level non-voted base levies with county-level mills to equalize property-tax capacity and adjust guaranteed-tax-base distributions; proponents say most jurisdictions would see modest tax relief while opponents call the measure premature and urge study before making permanent changes.
Representative David Beatty told the committee House Bill 156 would replace district non-voted general fund base levies with a county-level mill levy, with the objective of equalizing property-tax capacity across school districts and improving the effectiveness of guaranteed tax base (GTB) subsidies. Beatty said initial modeling suggests most taxing jurisdictions would see modest mill reductions, with a median mill decrease in early modeling and some variation across counties.
Lance Melton (MTSBA) testified the bill addresses wide disparities in the ability to raise revenue across Montana school districts, noting examples where one mill yields 34 cents per pupil in one district and more than $2,700 per pupil in others. He said county-level pooling would reduce disparity and strengthen the state’s ability to equalize funding. "By going to the county level... you actually substantially reduce the disparity in mills across all of the school districts in the state," Melton told the committee.
Ryan Evans, assistant budget director in the governor’s budget office, testified in support, saying the bill mirrors a conceptual recommendation of the Governor's Property Tax Advisory Council and advances property-tax equalization and simplification.
Opponents, including Bob Story (Montana Taxpayers Association), called the proposal premature and urged it be vetted in the decennial study; Story warned countywide levies could move money between districts in ways that deserve fuller public vetting. He described limited net money movement in initial modeling and urged caution before a permanent structural change.
Informational witnesses from the Department of Revenue and the Legislative Fiscal Division (Dylan Cole and Julia Patton) were available and provided charts and spreadsheets showing the current distribution of mills by taxing jurisdiction and the projected county-level results. Patton offered a county-by-county spreadsheet to help members see how each taxing jurisdiction would be affected and said a follow-up briefing could provide more detailed district impacts.
Sponsor Beatty closed by describing technical details and cited House Bill 203 from the previous session as related context for school choice and tuition flow issues. Chair Rexton closed the hearing on HB156 and the committee adjourned until follow-up training and executive action on Wednesday.
Next steps: Fiscal staff will return with county- and district-level breakdowns to help the committee evaluate geographic winners and losers and the impact on GTB distributions before executive action.
