Missoula County Board of Commissioners

Since the state Department of Revenue’s reappraisal notices arrived in mailboxes this summer showing skyrocketing home values and estimated taxes, property owners have heard a lot about the problems with property taxes and who’s to blame for them. You’ve seen news stories, talked to neighbors and talked to us about your fears around how you’re going to pay your taxes this year.

We’ve come to a collective understanding of the problem, and now we need to talk about potential solutions. You may have heard or read about steps the Legislature could have taken, such as lowering the tax rate for residential properties and increasing it for large corporations and utilities – as it’s done in years’ past – or decreasing the dollar amount the state levies in property taxes. Those fixes certainly would’ve alleviated the current situation, but we also want to share a long-term solution Missoula County has been working on.

Montana’s tax system is sorely outdated, and, to paraphrase former DOR Director Dan Bucks, is now rigged in favor of larger corporations and utilities, at the expense of homeowners and renters across the state. In the past, the system matched our economy, as local governments could rely on tax revenue from lumber mills and other industries with large property footprints. These industries carried 60% of the property tax load, and 40% came from residential property (renters and homeowners). That burden has now swapped, with residents bearing 60% of the tax load in Missoula County. Today, our economy is much more diverse, including a robust tourism industry in many counties. Our tax system should reflect this fact. The state could recognize this fact and adjust tax rates accordingly. This is an easy first step toward a comprehensive solution.

Over the past year, we’ve been garnering support from city and county leaders on both sides of the aisle across the state on a more permanent, large-scale fix. We developed a proposal that would allow residents of a county or city to vote in a sales tax on items mostly tourists use, such as hotels, rental cars and restaurants and bars. This tax would not apply to essentials like groceries or medications. The revenue from this tax would provide one-to-one property tax relief to residents, meaning for every dollar coming in from a tourist tax, a dollar would come off property taxes. This proposal, dubbed “Property Tax Relief Through Tourism,” would not generate any new revenue for government, but provide property tax relief to residents. Tourists should pay for the services they use.

The tourism industry contributes mightily to local economies in many Montana counties, including Missoula. And there’s a corresponding cost to local governments — and in turn, you, the taxpayers who live here — must shoulder. During any given summer, tens of thousands of tourists visit Missoula County. They come, in part, for our easy access to beautiful public land and water, but there are plenty of other spots in the West that boast these attributes. They come here because Missoula County also has an incredible array of other public amenities, an enticing culture and a vibrant economy.

We created these amenities with property tax dollars. Our guests enjoy all this place is, and while they’re here, they spend a lot of money, and they need to use our services. Property taxpayers cover the costs of these services: roads, public safety, 9-1-1, water and wastewater systems, and everything else it takes to have a well-run society. For the most part, state law prevents local governments from leveraging any of this tourist spending to help fund services they use, and it’s time for elected officials across the political spectrum to change that.

But what about the counties that don’t benefit from tourism? Under this proposal, a portion of the revenue would go to the state, which would then distribute funds to non-tourist counties to support things like local schools and infrastructure updates, costs that would also normally be paid for with local property taxes.

This proposal is a win-win for residents across Montana, and a poll that the state Chamber of Commerce conducted last year backs this up: 70% of respondents said they supported the idea.

Giving localities the ability to enact a proposal like this would require action from the Legislature, which doesn’t meet again until 2025. Interim committees are discussing the property tax problem, though, and it’s not too early to reach out to your legislators to let them know you support this sort of long-term property tax relief.

Even if this idea gains speed, implementing it would still be a long way out. Right now, one way we can all be part of the solution is to get involved in the County’s budget process, which is what actually determines the County property taxes you’ll see on your tax bill this fall. During our budget process, we often hear the general refrain “don’t raise property taxes,” but we rarely hear any specifics on what services people are willing to reduce to make that a reality. So, if you want a say in how your property taxes are spent, speak up, and be specific. Go to missoulacountyvoice.com, where you’ll find information on the FY 24 budget and how you can participate.

Signed: Missoula County Commissioners Josh Slotnick, Dave Strohmaier and Juanita Vero

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