Gov. Gianforte significantly raised MT’s residential property taxes. Why?
State of Montana Newsroom December 05, 2023 “Governor Greg Gianforte today announced he will launch a task force to address rising property taxes and how to restrain their growth to help Montana homeowners.” Source: Governor Gianforte To Launch Property Tax Task Force
Why does Governor Gianforte now want to help homeowners after he asked the Legislature to adopt his budget for Montana that permanently raised taxes on homeowners by more than $200 million a year – one of the largest tax increases in Montana history? What will the Gianforte Property Tax Task Force recommend as a solution? Based on our research, it begs the question – is a statewide sales tax on the horizon?
Background
May 30, 2002 Greg Gianforte testified before Governor Martz’s Income Tax Advisory Council Meeting recommending a sales tax:
“Greg Gianforte, a taxpayer from Bozeman and CEO of RightNow Technologies, a software company employing 200 people testified... He presented three particular solutions: If we want to create high-tech jobs, the best solution would be to replace the current income tax with a sales tax. He proposed we eliminate federal deductibility, thus lowering the marginal tax rate. … He said we need to do something about capital gains. …”
Sources: 5/30/02 Minutes Income Tax Advisory Committee Meeting Minutes https://web.archive.org/web/20020623232903/http://www.state.mt.us/gov2/css/taxplan/incometaxminutes5_30.asp 5/30/02 Minutes Income Tax Advisory Committee Meeting Minutes PDF
Audio recording of Greg Gianforte's presentation on 5/30/02 to Governor Martz Income Tax Advisory Committee https://www.youtube.com/watch?v=v-th2Blsyxw
Two decades later…
Greg broke his 2020 gubernatorial campaign promise not to raise property taxes on Montanans.
When running for governor, Greg Gianforte’s website, gregformontana.com, spelled out campaign promises in his Montana Comeback Plan to Cut Taxes for All Montana Taxpayers, not raise taxes, and oppose a sales tax.
Fact Check:
Candidate Gianforte’s promise to use a budget surplus to permanently reduce property taxes for all Montana taxpayers did not happen. Greg raised property taxes on residential homeowners, while the state budget had a $1.5-billion surplus. Source: Median Property Value Changes by County - Montana Department of Revenue, Montana Certified Values
MTFP (Montana Free Press) estimates that residential properties will pay 47% of property taxes collected statewide in 2023, up by 5 percentage points from 2022. Industrial properties, in comparison, will pay 23% — down by 5 percentage points from last year. Source: Montana homeowners see higher property taxes as some big businesses pay less
The promise by candidate Gianforte opposing sales taxes is contradictory to his statement as a Right Now Technology business owner in 2002 recommending a sales tax. Source: 5/30/02 Minutes Income Tax Advisory Committee Meeting Minutes
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Governor Gianforte’s Executive Budgets
First year in office, 2021
Governor Gianforte's Roadmap to the MONTANA COMEBACK, 2023 Biennium Executive Budget reflects campaign materials: Montana Comeback Plan.
Governor Gianforte’s limited strategy to deal with looming reappraisal valuations and a historic increase in residential property taxes in 2023, was spelled out in this Governor’s Budget Office handout: Providing Relief to Montana Homeowners
What happened in the 2021 Legislative Session SUMMARY OF ENACTED AND VETOED TAX LEGISLATION
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2023 Gianforte’s third year in office Governor Gianforte’s 2025 Biennium Executive Budget included both an increase in residential property taxes and tax rebates.
Montana Tax Payer Annual Meeting December 08, 2022 “Montana Governor Greg Gianforte was the keynote speaker … rebate checks to Montana homeowners to relieve some of the burden of property taxes on their primary residence.” Source: 101st Annual Meeting Wrap-Up
Facts: Despite a $1.5-billion budget surplus, Governor Gianforte did not cut property taxes for Montana families. He raised taxes on residential homeowners. According to the Montana Department of Revenue, residential property taxes increased by 43%, with an additional $81 million for the state portion included in the governor’s executive budget. Governor Gianforte’s keynote to the Montana Taxpayers Association accurately described his tax rebate as providing some temporary relief. Some residential property owners were eligible for a tax rebate as a one-time financial offset for the permanent tax increase of at least $200 million a year burden on residential homeowners. Source: Montana Department of Revenue Estimated Property Tax Growth Between TY 2022 and TY 2023
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What happened in the 2023 legislative session
SUMMARY OF ENACTED TAX LEGISLATION
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Now - where is the Governor headed?
Currently, the Legislature’s Revenue Interim Committee is undertaking a “comprehensive examination of the state's property tax system with a goal of identifying problems and possible solutions.” The Governor’s Department of Revenue serves as a primary resource to this Committee. Source:https://www.leg.mt.gov/committees/interim/ric/ric-property-modernization-study/ Property Tax Library - Montana State Legislature
Coincidently, Governor Gianforte said in his press release, “Our property tax task force will deliver an actionable plan to rein in property taxes for legislators to consider for their next regular session in January 2025.” And, no surprise, the Governor’s Department of Revenue will also serve as a primary resource for his task force.
Source: Governor Gianforte To Launch Property Tax Task Force, State of Montana Newsroom
Let’s circle back to 2002 when Greg Gianforte addressed Governor Martz’s Tax Committee and suggested a sales tax as the best solution. As Governor, along with a legislative majority of the same political party, Gianforte has accomplished his goals of reducing income taxes and the capital gains tax. He also touts success in promoting a pro-business climate with changes to the business and equipment tax. So, why did Governor Gianforte contradict his campaign promises and raise residential property tax the highest in Montana’s history?
What’s next for Montana taxpayers - a new statewide sales tax, perhaps? JustFactsMT will be watching and we will let you know what we find out.