Senate OKs changes to House reappraisal bill

HELENA – The Senate voted 30-20 today for a bill seeking to lessen the potential blow to Montanans’ wallets from the most recent statewide property reappraisal.

The Senate Taxation Committee’s amendments to House Bill 658, carried in the Senate by Sen. Jeff Essmann, R-Billings (pictured), changed the bill from the House version sent over earlier this month.

“This bill is a product of a long journey,” Essmann said on the Senate floor.

Property values in Montana are reappraised every six years to ensure equity in property taxes. To help stave off a sudden hike in property taxes due to big jumps in property values, the Legislature in recent years has increased exemptions and lowered tax rates.

Essmann said the Senate amendments allow increases in property values to be phased in while tax rates are gradually reduced. He also said one of the most important amendments was adding a provision that requires the Department of Revenue to study whether statewide property values have dropped significantly since last summer's reappraisal.

“If a slump in the value of homes occurs in the next two years, they will be able to assess that,” Essmann said.

According to supporters, the bill is very similar to what was done in the past two appraisals. Property owners will still see an exemption on a percentage of their home'a value, called a “homestead exemption.” However, Essmann’s bill increases the percentage from 34 percent to 47 percent in six years. Likewise, tax rates for residential propertyh would see a phased-in decrease from 3 percent to 2.47 percent.

HB 658 also included provisions to keep four programs that help needy residents pay their taxes, including elderly homeowners, low-income owners and disabled veterans. Sen. Christine Kaufmann, D-Helena, offered an amendment that would aggregate those groups into one property-tax assistance program based on how much such people pay in income taxes.

Kaufmann said the state could pay for the new program if it removed the homestead exemption from vacant lands.

“A home is a home,” Kaufmann said. “It doesn’t seem proper to me that we provide a homestead exemption for property that doesn’t have a home on it.”

Sen. Bruce Tutvedt, R-Kalispell, said the idea is a good one but its implications need to be studied before changing the programs. He said there is already a provision in HB 658 to study this change.

The amendment failed, 23-27.

Kaufmann said the amendment would have helped low-income taxpayers because they pay the higher percentage of their salaries toward property taxes than any other group.

“I’m disappointed we seem to have ended up with very little change with what we’ve done in previous years,” Kaufmann said.

Since the Senate amended the bill, it needs to be sent back to the House for approval before it can be signed into law by the governor. It will most likely head to a conference committee, which is a joint committee of senators and representatives charged with hashing out differences between the houses.

-by CNS correspondent Molly Priddy