HELENA — The Montana House on Wednesday approved two Republican-sponsored bills that would cut millions of dollars in property taxes on businesses and homeowners.
The GOP-controlled House endorsed both bills while declining to advance alternative tax cut proposals offered by Democratic Gov. Steve Bullock.
On a party-line vote of 61-39, Republican passed HB230, by Rep. Scott Reichner, R-Bigfork, that would reduce property taxes for businesses and homeowners alike.
The House then endorsed HB472, by Rep. Jerry Bennett, R-Libby, by a 96-4 vote to reduce property taxes on business equipment.
The House then sent the measures to the House Appropriations Committee, which will examine how they fit into the overall state budget being crafted by the panel.
Reichner’s bill would reduce property taxes on individuals and businesses by about $50 million a year, by cutting the statewide school-equalization property tax levy to 19.6 mills from the current 40 mills.
“Once again, our taxpayers in the state of Montana have over-performed,” Reichner said. “We have a surplus of $450 million to $500 million. Join with me in sending some of it back equally and fairly.”
Contrasting his bill with Bullock’s stalled bill to provide Montana homeowners with a one-time, $400 property tax rebate, Reichner said: “This is no gimmick bill. This is not a one-time rebate that you’re taxed on. This is permanent.”
Reichner said he hasn’t run into a single person who favors the $400 rebate.
Rep. JP Pomnichowski, D-Bozeman, led the opposition to Reichner’s bill, saying, “This is taking a machete to our property taxes.”
Pomnichowski said the bill would cost about $105.8 million over the next two years and $113 million the following two years.
She said the bill would provide an annual property tax cut of only $44 a year for the average homeowners, while large corporations would get much more.
Bennett’s HB472 would exempt the first $250,000 worth of a business’s equipment from property taxes, eliminating the tax for 14,000 of the 18,000 businesses in Montana.
As a result, businesses whose equipment is valued at $250,000 or less no longer would have to pay the tax.
Its price tag is $22 million for the next two years and $26 million for the next two years.
Seven states already have eliminated this tax, Bennett said, while four others, including Idaho, also are looking at getting rid of it.
“If we don’t incentivize businesses to grow and stay here, they are very mobile,” Bennett said.
Bullock’s proposal would eliminate the tax on up to $100,000 worth of a business’s equipment.
Pomnichowski said Montana doesn’t need to provide any more incentives to compete, and already has an advantage for business by not having a sales tax, unlike neighboring states.
Yet House Minority Leader Chuck Hunter, D-Helena, said he intended to vote for the bill and was certain it would go to House Appropriations Committee for more discussion.
The two bills are expected to pass a final House vote Thursday, well before the April 5 deadline for revenue bills to pass from one legislative chamber to the other.
Meanwhile, Bullock’s two property-tax bills are stuck in the House Taxation Committee.
The panel has taken no action on HB361, which is Bullock’s proposal to provide the one-time, $400-per-Montana homeowner rebate at a total cost of $100 million. Hunter is the sponsor.
The committee has tabled HB332, which would eliminate the business equipment tax on equipment valued at $100,000 or less. Its cost to the state treasury is $6.6 million for the next two years and $8 million in the following biennium.