Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Lodging Tax Property Tax topic
No spam. Unsubscribe anytime.
Montana committee hears fierce opposition to plan to divert lodging-tax growth for property-tax relief; amendment passes but bill fails
Summary
Rep. Jane Gillette’s bill would shift growth from the lodging-facility tax into a state account for property-tax relief while keeping Commerce’s baseline whole. Commerce and tourism groups say it would cut grants and rural programs; the committee approved an amendment but voted down the bill.
Representative Jane Gillette, sponsor of House Bill 887, told the House Local Government Committee the bill would steer lodging-facility tax growth beyond a 3-year inflation average plus 0.5 percentage point into a state special revenue account dedicated to reducing residential property taxes, while preserving Commerce’s baseline funding and adding an amendment to send 25% to counties for roads.
The bill’s sponsor, Representative Jane Gillette, said the design protects the Department of Commerce’s expected base funding and gives communities a way to offset local burdens tied to tourism growth. “We don’t remove anything from their budget,” Gillette said, describing the proposal as a way to smooth spikes in lodging-tax revenue and dedicate incremental revenue to property-tax relief.
Department of Commerce officials and the tourism industry urged rejection. Mandy Rambo, Deputy Director and acting director at the Department of Commerce, said the department relies on the lodging tax for statewide marketing and eight grant programs that flow back to communities. She warned the change would weaken Commerce’s ability to support rural tourism and cited the recent 2023 law (SB 540) that directs some funds toward community programs. Shelly Mann of the Montana Lodging and Hospitality Association said HB 887 could cut roughly $2 million from Commerce in the upcoming biennium and stall pilot programs and grants that support emergency services and local economies in rural counties.
Other industry witnesses — including the Montana Travel Association, chambers of commerce and local tourism development groups — said the lodging taxes create a virtuous cycle of investment and marketing that supports jobs and local infrastructure. Several testified that diverting growth could reduce tourism marketing effectiveness, pointing to the risk that Montana could lose market share.
Committee members pressed the sponsor and Commerce staff on the mechanics: Montana collects two lodging-related taxes commonly called the bed tax (a lodging facility use tax and a lodging facility sales tax). Gillette described a formula based on the last three years’ inflation plus a half-percent hold-harmless for Commerce; anything above that threshold would flow to the property-tax relief account or, per the amendment, to counties for roads if related legislation (SB 90) does not pass.
In executive action the committee adopted Amendment 887.1.1 (a committee vote recorded as 16–1 in favor). When the committee then voted on HB 887 as amended, the motion failed on a roll call of 3 ayes to 14 noes; the committee did not advance the bill.
What’s next: The committee’s roll-call record shows the amendment had majority support but the full do-pass motion did not. Because the committee voted the bill down, HB 887 will not move forward from this committee unless reconsidered or amended further at a later step.
Vote record (committee action): Amendment 887.1.1 — adopted (voice/roll count reported 16–1). Final vote on HB 887 as amended — failed (roll call 3 ayes, 14 noes).
