Montana Democrat News

For years, as a legislator, I looked for a means to assess the impact of legislative policy on the taxes paid by Montana property taxpayers. As I searched for a consistent measure of property taxes, it became apparent that mill levies and the changes in mill levies applied to Montanans taxable property were the one consistent and objective measure by which to gauge whether property taxes were increasing or decreasing. I began this project looking at the counties I served as a State Senator. As I looked at those changes in Blaine and Hill Counties, I became curious about how those changes compared to other counties in Montana.

I also needed a consistent source for the information I would be analyzing to make my assessment of how legislative policy changes the property taxes paid by Montanans. Although legislative agencies and the Montana Department of Revenue issue enormously detailed and useful information related to taxes by jurisdiction, the most consistent source I found for my analyses are the annual reports issued by the Montana Taxpayers Association in their publication Montana Taxation. Though the Association and I did not always share the same approach to taxation issues, their presentation of "Total Property Tax Levies by School District" has been consistently straight-forward and informative.

Frequently, changes in legislative policy aren’t reflected immediately in property tax outcomes and the effects are often cumulative over time. Therefore, I chose to use a longer than two year time-frame to assess the changes in property taxes due to legislative policy. The period I chose, 1993-2005, is generally agreed as the period when the Republicans dominated property tax and school funding policy in the state of Montana. During that period, Republicans frequently hailed their actions as major property tax reductions and that their party could be trusted to look out for the interests of the taxpayers.

However, the results of my study are startling. In the period when Republicans dominated the legislature and Governor's office, property tax mill levies increased in all but parts of four school districts in the State. The magnitude of those increases all around the State are startling, usually dwarfing any calculation of inflation during the period.

Though policy makers are often given to looking at averages and then deciding whether those averages are tolerable, averages frequently don't tell the whole story. For example, the residents in a rural part of the Plentywood school district in Sheridan county experienced a 190.6% increase in their mill levies from 1993 to 2005. And the residents of tiny Westby, Montana can claim the distinction for paying 1024.99 mills in 2005, the highest combined rate anywhere in the entire state of Montana. Since mills are frequently misunderstood, let me translate. The property taxpayer in Westby pays $1024.99 for every $1000 of taxable property that taxpayer owns. For those taxpayers, averages are no solace. Therefore, my study does not calculate the changes in property taxes using any kinds of averages. It reports the changes by identifiable jurisdiction.

The startling magnitude of these changes is not limited to Sheridan county in northeastern Montana. Pick counties randomly and the increases in property taxes are shown to be enormous. For example, in Beaverhead county, the increases ranged from 45.4% to 65.8%. In Flathead county, the increases ranged from 18.5% to 62.6%. In Toole County, the increases ranged from 38.9% to 75.4%. Finally, in Yellowstone County, the increases ranged from 34.3% to 69.7%.

While I did not calculate averages for counties, the Department of Revenue has made those calculations.

So how did Republicans manage this amazing feat of raising property taxes generally all over the state at the same time they claimed to be providing enormous amounts of property tax relief? Part of the answer is in the question. By granting enormous tax breaks on certain isolated classes of property, i.e. business equipment, they shifted the burden to the remaining property taxpayers, residential, commercial and agricultural. As they reduced the tax base in taxing jurisdictions, they forced county commissions, city councils and school boards to increase mill levies on the remaining taxpayers just to maintain the same level of services.

The second major contributor to increased property taxes due to Republican policy choices during this period was their refusal to properly fund the State's portion of public education. As the Republican legislature reduced the proportion the state contributed to education costs, local school boards were force to raise local mill levies just to maintain the same level of service.

This report is clear and convincing evidence that Republican policies did not result in tax reductions, they result in tax shifts. To be sure, some favored, special interests got the benefits of those shifts, the rest of the taxpayers got the shaft.

Senator Don Ryan reports to me that under the Governor’s leadership along with Senator Jon Tester and Representative Monica Lindeen, co-chairs of the school funding committee, Democrats in the Montana legislature have begun to reverse the pattern of ever increasing property tax mill levies. The level of state funding for public education established during the special session is resulting in mill levy reductions all over the state. Congratulations. We need more good public policy like that.

Republicans promise, in their 'handshake' promotion that they will lower property taxes. Given our experience with the results of their policy implemented over 12 years, I do not believe Montana’s residential, commercial and agricultural property taxpayers can afford anymore Republican special interest tax relief.

I have attached the Xcel files with the information for your county. Don't be intimidated by the information. What matters for an individual voter (taxpayer) is what their taxes did.

Sincerely,

Greg Jergeson

Chinook, Montana

Notes on methodology:

1) Total mill levies are the combined mill levies for county, city and education. The education mills include local, statewide and university mills. Special mill levies for other kinds of districts are not included in my calculation of total mills.

2) Typically, the taxpayer living within city limits pays city mills, county mills less certain mills like road taxes, and education mills. The taxpayer outside city limits, while not paying city mills, generally pays higher county mills and education mills. In the tables, the part of a school district within the city limits is indicated by (C ). Rural parts of school districts are indicated by either (R ) or just a number.

3) Statewide mills for education have not been increased since well before the beginning of the period.

4) A mill is $1 for every $1000 of taxable property. Therefore, 500 mills equates to $500 for every $1000 of taxable property.
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