An online fundraiser launched by a Missoula man last spring helped keep nearly three dozen families in their mobile homes after they’d fallen behind on taxes owed to the county.
Nearly 10 months removed from the drama that played out last April, Svein Newman is pushing to avoid a repeat when taxes come due this year.
This time, however, he hopes to have the law on his side.
“Missoula places a lot of emphasis on affordable housing,” Newman said Tuesday. “It seems ridiculous that people are losing their homes because of a $100 or $200 debt. Not only are the human impacts of that huge, but the economic impacts are large as well.”
Newman is closely watching a legislative bill that would exempt certain types of mobile homes from property taxes. He found a sponsor for his proposal in Sen. Margie McDonald, D-Billings, who has since gained several Missoula cosponsors.
As written, the bill would exempt from taxation any mobile home 28 years or older that’s valued at less than $10,000. In Missoula County, roughly 4 percent of taxpayers live in housing that meets that standard, according to Clerk and Treasurer Tyler Gernant.
“It would exempt 2,170 mobile homes that are currently being taxed that would no longer be taxed,” said Gernant. “It would cost approximately $170,000 in total tax revenue.”
Gernant, a proponent of the legislation, said the $170,000 revenue loss would be evenly split between the city of Missoula, the county and local schools, further softening the reduction. While the figure sounds large, he said, it represents just 0.1 of 1 percent of the total tax revenue collected across Missoula County.
“It’s a pretty big discrepancy over how much we’d be losing in tax revenue and how many people we’d be exempting from taxation,” he said. “When you say $170,000, people see that as a big number, but it’s really not when you divide it out across all the taxing jurisdictions.”
While the financial impacts would be different for different counties, therefore gaining the measure its share of opponents, supporters like Newman and Gernant see it as a common-sense approach to a problem experienced across the state, and in counties big and small.
Montana law requires counties to auction mobile homes if the owners fall behind on their taxes, often leaving the state’s most vulnerable residents homeless. Missoula County conducts one such auction each year after homeowners are notified and given one last chance to pay delinquent taxes.
“The properties that head for auction are usually the oldest and lowest value, where folks are only paying $100 in taxes and yet, they can’t make it work,” Gernant said. “We’ve tried to isolate as best we could that population to minimize the impact on revenue but maximize the impact on housing security.”
The issue came to a head last spring when Gernant was forced to serve notice on dozens of mobile home owners in Missoula. That prompted Newman to launch a GoFundMe account, which netted nearly $10,000 and paid to keep 31 families in place.
When word spread, it caught the attention of several lawmakers, including Margie McDonald. She stepped up to carry Senate Bill 204.
“She came to realize it was a problem across Montana,” Newman said. “It started a long series of conversations with tax lawyers, former directors of the Montana Department of Revenue, counties and Tyler (Gernant). This is maybe the fourth or sixth iteration. We needed to tune the potential solutions until we ended up where we are now.”
Newman said the current structure of seizing and foreclosing on someone’s mobile home due to a small debt is not only a security issue, but one of social justice. As it stands, many proponents contend it costs the county more money to chase down those debts than what it would otherwise collect.
That makes it an administrative burden to the county and a PR nightmare, as evidenced by last year’s debacle and the near seizure of so many mobile homes – and the eviction of so many families.
“That’s really where this started, to get a better collection method that didn’t involve people losing their homes and talking with a lot of legislators,” Gernant said. “This would pretty much eliminate everybody who was in the mobile home auction the last few years. For the most part, we wouldn’t have the delinquency problem that we have now.”
The 28-year benchmark in McDonald’s bill was established by using codes set by the IRS and Congress, which determine the useful life of a property. For trailer homes, that useful life is currently 27.5 years.
For now, the proposal has the expressed support of Missoula County commissioners, who called the reduction of revenue insignificant.
“This is appealing to me in that it seems like we’d be providing some tax relief to people who are really at the bottom end of the spectrum,” said Commissioner Josh Slotnick.