Montana speaker criticizes Missoula County tax increase
Keila Szpaller
(Daily Montanan) Montana Speaker of the House Brandon Ler criticized an 8% tax hike in Missoula County and said the increase is evidence more property tax reform is needed in the Treasure State.
“Montanans deserve stability, not surprise increases every budget cycle,” said Ler, a Republican from Savage, in a statement earlier this week. “It’s time to have a serious discussion about putting limits on local mill increases in future sessions so families can plan and budget with confidence.”
But Missoula County Commissioners said the impact on residential homeowners actually amounts to an 11% decrease — and the dollars are mostly going to paying a living wage for staff to provide services residents expect.
Even with the decrease for residential payers, the county budget can be larger because legislative changes mean other classes of property taxpayers, such as agriculture, pay more, said Chris Lounsbury, chief administrative officer for Missoula County.
He said the change is the Montana Legislature’s response to an earlier reappraisal that resulted in a roughly 35% burden shift onto residential payers in Missoula, and the current adjustment pushes roughly 21% back to other classes.
“Both sides of the aisle did a good job of pointing out whenever you change tax policy, it does have impacts in ways you can’t 100% predict,” Lounsbury said.
Lawmakers passed a property tax reform package in the 2025 Montana Legislature after intense debate, but on behalf of Republican leadership in the House, Ler said the increase in Missoula “highlights the need for future reforms.”
Property taxpayers also have been protesting their reappraisals this year, albeit not to the degree they filed appeals in 2023.
Representatives of local governments, however, pushed back at the idea of further curtailing their ability to collect taxes.
House Republicans call for more reform
In the statement from House Republicans, Ler said lawmakers are prepared to consider in the 2027 legislative session proposals that would “place reasonable caps on local mill increases.”
“Such measures would provide predictability for taxpayers, bring accountability to local budgets, and prevent families from being blindsided by sudden hikes,” the news release said.
The Legislature currently caps local government mill increases at roughly half the rate of inflation, and a spokesperson for Ler said the Speaker doesn’t have a specific number in mind for where to move the cap at this point.
In the 2025 session, the Legislature passed a bill to require local governments to represent voted levies in dollars instead of mills — because mills are confusing to the general public.
A mill is a tax rate equal to $1 for every $1,000 in taxable value. If a county levies 25 mills, the cost to a property taxpayer is $25 for every $1,000 in taxable value.
Jennifer Olson, with the Montana League of Cities and Towns, said local governments already are making that change from House Bill 20, which takes effect on Oct. 1.
“I think there’s a general sentiment that provides transparency,” Olson said.
However, she also said it’s important for local governments to be part of the conversation about property taxes from the beginning because they are on the “ground floor” when it comes to providing basic services, things like police and fire.
Municipalities account for roughly 10% to 15% of total property tax bills depending on the district and voted mills, she said.
Currently, she said, the cap at half the rate of inflation — averaged over the previous three years — limits the ability of local governments to maintain its responsibilities, such as to manage its sewer treatment, or even to grow responsibly.
“What is it, holistically, that a community needs to be able to bring in businesses or bring in tourism dollars or to support a large business economy?” Olson said.
But she said the months between legislative sessions are a good time to continue the discussion, especially because there’s no single answer.
“It is a complex system, and there are complex needs out there,” Olson said.
Missoula County responds
In an email to the Daily Montanan, Missoula County Commissioners said their budget already falls under the half-the-rate-of-inflation cap set by the Montana Legislature.
“Even with this limit, Missoula County has not levied the full amount of available mills for the past several years — including this year,” commissioners said. “Any statements implying otherwise come across as willful attempts to obscure the facts to score cheap political points.”
A budget presentation from the county showed the way the legislative change affected various properties.
For example, one home in Lolo with a higher market value this year compared to last would actually see a lower taxable value and pay $179.10 less in taxes, or 9% less — even with the overall tax increase in the county.
Lounsbury said that’s because mills get applied across all property tax classes. Since the tax values in residential went down, the money generated from residential properties will be smaller too.
“It basically shifts so those mills will raise less money in residential and more money in other property tax classes,” Lounsbury said.
Toward the end of the legislative session this year, some lawmakers said that shift was too large, although others said they didn’t have constituents complaining to them about the taxes big corporations pay.
In their email, Missoula County Commissioners said the county has proposed “innovative alternatives” to fund local governments besides property taxes, but “unfortunately, Speaker Ler has opposed those efforts.”
“We hope enough legislators on both sides of the aisle will continue working to reform the state’s property tax system in a way that won’t hamstring the revenue counties need to protect public safety, answer 9-1-1 calls, pave and plow roads, run elections and provide other services Montanans rely on,” the commissioners said.
Lounsbury, though, said he believes Ler, the county, and every legislator is “trying to do their best in a really complicated — really, really, complicated — (property tax) landscape.”
“There is no such thing as a perfect tax system,” Lounsbury said.