property tax relief
Montana has a history of cutting taxes for the wealthy and creating loopholes for special interests and out-of-state corporations. This failed strategy has left counties without the resources to keep property taxes low. Tax system reforms should include three things:
1) collecting all the taxes owed to us,
2) closing tax loopholes, and
3) redirecting revenue toward the things that put pressure on county coffers, like public education, mental health crisis response, affordable housing and crime prevention.
We are not collecting all the taxes owed to us. For example, “pass through” entities create complex webs of ownership to disguise corporate earnings as personal income, which is taxed at a lower rate. Pass through entities should be taxed at the corporate rate. Another example is secret tax settlements: corporate property owners who protest their tax bills are allowed to cut deals with the Department of Revenue without letting auditors and assessors see pertinent information. We should repeal secret tax settlements.
Cleaning up Montana’s tax code by eliminating special tax breaks will make our tax code fairer and stop waste, fraud and abuse. We are losing at least $241 million each year through tax loopholes which most Montanans can not access. Most of these loopholes are obscure, archaic and benefit only out-of-state corporations, special interests and the very wealthy: things like the “oil and gas tax holiday”, the “water’s edge election”, and “carry back of corporate net operating losses”.
When we increase funding to public schools, it reduces pressure on property taxes. Today 58% of property taxes are used to support schools. In 2010-2011, schools received about 43% of their funding from the state, and 25% from local property taxes. We can increase the state share of school funding to decrease property taxes.
The state share of funding for mental health services, crisis response, and crime prevention can similarly reduce property taxes. When the county sheriff is called to a mental health crisis and takes a person into custody, the county pays for it, and the county relies on property taxes.