Property Tax Bill is Going Up

Supreme Court Decides on 95 Mills Issue

On November 22, the Montana Supreme Court in a 7-0 decision clarified that the Department of Revenue (DOR) “has exclusive authority to calculate school-equalization mills, and that counties must levy them consistent with the Department’s calculations.” The counties’ position was that “no banked mills exist because the state has always levied the max, 95 mills. That provision of law was implemented to allow local governments to reserve unused levy authority year after year, but the court determined that DOR can take advantage of that same provision and levy extra mills when they choose.” Eric Bryson, Executive Director of MACo, in an email to members stated, “While [the Court’s] opinion was directly in contrast to the position of many counties, and the Montana Association of Counties in our defense of our membership, we recognize the Supreme Court’s determination and appreciate the clarity.”

To comply with the Order, the 49 counties that chose not to collect the full mills will now need to evaluate their available options. MACo recommends counties adjust the second half tax bills to reflect the increase in mills. Carbon County intends to follow that recommendation.

Chris Hindoien, Mayor of Choteau, wrote to taxpayers in his city:

“In the past when appraisals went sky-high, like they did this year, the Governor and the Legislature always lowered the “tax rate” to offset what would otherwise be a large increase in taxes. This past year Governor Gianforte and the Legislature chose not to lower the homeowner property tax rate and as a result, the State of Montana raised property taxes for thousands upon thousands of Montana homeowners.

“On November 17, 2022, Governor Gianforte’s own Department of Revenue (DOR), according to law, alerted the Legislature that the tax rate needed to be lowered from 1.35% to 0.94% so there would be no sticker shock from the high reappraisals — thus leaving home taxes essentially the same.

“Governor Gianforte put the increased state’s portion of the homeowner taxes into his budget, and that was subsequently approved for appropriations by the Legislature to be spent. And, since the Legislature did not lower the tax rate, nearly $200 million a year in additional homeowner property taxes (according to the DOR) were permanently added on the backs of Montana homeowner taxpayers.

“Because of the intricacies of the property tax laws, this caused a $110 million tax shift away from industry and corporations onto the backs of Montana homeowners. In just one year, the homeowners’ share of property taxes in Montana increased by 6% (from 53% to 59%) — one of the largest tax shifts in history.”

When asked his views on the Court’s opinion, Carbon County Commissioner Scott Blain reflected, “It’s unfortunate that taxpayers lost this fight with the State. I think if counties believed that this windfall in State revenue would actually go to the schools, we wouldn’t have fought this in Court. Locally elected officials owed it to our taxpayers to at least try standing up to the State.”

Though the Supreme Court’s decision is not the one the County had hoped for, the Commissioners appreciate the Court ruling on the issue promptly so they can collect the increased taxes in the manner least disruptive to Carbon County citizens. “The Supreme Court exists to settle conflicts between legal opinions. They applied the law and our Constitution and found that in order to ‘harmonize Montana property tax law with the Montana Constitution’s directive to ensure equal educational opportunity across Montana’ that the DOR must have the authority to bank mills and levy the full 95 mills this year and into the future. We accept the ruling and will comply promptly. This is how our system works. There are no hard feelings,” concluded Bill Bullock.

As soon as Carbon County has recalculated the property taxes, taxpayers will be notified with the new calculations.

Governor Gianforte’s office did not respond to a request for a copy of their press release on the ruling.

Update: At 7:34 p.m. on November 27, Governor Gianforte’s office provided the following statement:

“I appreciate the Montana Supreme Court bringing clarity to the law around the 95 public school mills which the state collects and returns in full to school districts. Today’s decision reaffirms what has guided us: we have an obligation, both constitutional and moral, to ensure each Montana child has access to a quality education, and we won’t defund our public schools."

“Ultimately, property taxes are too high. In the short-term, our $1,350 property tax rebate provides the average Montana homeowner with relief that more than offsets property tax increases this year and next. I remain committed to enacting further long-term reforms that keep property taxes as low as possible, including holding the line on local spending that drives property tax increases.”