House advances property tax assistance expansion

A bill that expands one of Montana’s main tools for ensuring low-income homeowners aren’t priced out of their homes by property taxes advanced in the Montana House Friday.

House Bill 189 would raise the portion of a home’s value that can qualify for property tax assistance under the state’s Property Tax Assistance Program, upping the limit from $200,000 to $350,000. It would also increase the income threshold for qualifying in the program, making ongoing property tax relief available to individuals who make up to $27,621 a year and couples who make up to $37,019.

The House gave a preliminary endorsement to the bill, sponsored by Rep. George Nikolakakos, R-Great Falls, on a bipartisan 81-19 vote Friday. A final vote to advance the measure to the Senate is expected Monday.

Under current state law, individuals who earn up to $21,032 or couples who earn up to $28,043 can apply to have a portion of their taxes on their primary residence reduced — with very low-income property owners able to have their tax bill lessened by as much as 80%.

A study on the assistance program conducted prior to this year’s legislative session noted that the program’s existing home value limit had fallen behind the state’s rapidly rising home prices. In 2015, the year the $200,000 limit was set, it was enough to cover the entire assessed value of more than four in five properties enrolled in the assistance program, legislative staff reported. This year, it’s expected to do the same for only two in five enrolled properties.

HB 189, which passed an earlier House floor vote 100-0 Jan. 27, was subsequently revised by the House Appropriations Committee to use a smaller home value, $300,000. The full chamber voted Friday to restore the $350,000 threshold.

Rep. Bill Mercer, R-Billings, said during Friday’s floor debate that he supported the lower price because other property taxpayers would have to pick up the tab for relief to program participants.

“We have to draw the line somewhere, and the higher that line is the more of a shift you’re doing across the other segment of property tax payers,” Mercer said.

Nikolokakos argued the $350,000 threshold was roughly equivalent to adjusting the original $200,000 threshold for how much the state’s home prices have increased in recent years.

“The shift already happened. All we’re doing is pushing the shift back down,” he said.