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February 27, 2025
The Montana Legislature’s ongoing effort to make a meaningful and long-term dent in the state’s rising residential property taxes rolled across the House floor this week, as three major tax bills advanced to the Senate.
The most prominent of those bills is House Bill 231, touted by Republican Gov. Greg Gianforte and developed by the Legislature’s longtime budget guru, House Appropriations Chair Llew Jones, R-Conrad. That bill would, broadly speaking, twist and turn various dials in the state tax code to reduce taxes on homeowners and landlords, paying for some but not all of that relief by raising taxes on second homes and Airbnb-style short-term rentals.
With the possible exception of Medicaid expansion renewal (which passed its final vote en route to the governor’s desk Thursday), HB 231 is perhaps the closest thing this year’s Legislature has to a must-pass policy — though various minority factions would love to kill or rework it so they can advance other ideas.
One of those factions is the Legislature’s Democratic minority, whose leaders have thrown their weight instead behind two proposals sponsored by Missoula-area Democrats. The first of those, Rep. Mark Thane’s House Bill 155, is essentially an alternative to HB 231 that would spin slightly different dials to lower taxes for residential properties without drawing a distinction between primary and nonprimary homes. The other, Rep. Jonathan Karlen’s House Bill 154, would offset property taxes for homeowners and renters via an income tax credit.
The Gianforte-Jones proposal has, however, also attracted opposition from some Republican lawmakers. That’s a contrast to 2023 when Republican leaders managed to keep their sprawling supermajority caucus in line to pass a billion-dollar slate of tax cuts and one-off property tax rebates.
This year, though, Senate President Matt Regier, R-Kalispell, has expressed opposition to the Gianforte-Jones bill, saying in a press briefing this week that he’s worried it wouldn’t provide enough relief to homeowners in high-value markets like Bozeman and the Flathead. Regier and Senate Republicans have instead pushed a measure, Senate Bill 90, that would route lodging tax dollars into an annual flat-fee property tax credit. Amended from a prior version that would have defunded state tourism promotion programs, it unanimously passed its initial floor vote in the Senate on Wednesday.
Some House Republicans have also balked at the Gianforte-Jones proposal. Rep. Terry Falk, R-Kalispell, forced a vote on a wholesale rewrite of the bill on the House floor Wednesday, arguing instead for simpler language that wouldn’t penalize second homes. (Falk’s push failed on a 40-60 vote).
As a result, with Republicans divided on the Republican governor’s highest-profile policy initiative this year, Democratic votes have become necessary to pass it. That’s given minority Democrats accustomed to being sidelined at the Capitol unusual leverage in tax policy negotiations in recent weeks — leverage they’ve used to secure concessions in the Gianforte-Jones bill and push both of their major tax bills through to the Senate.
As it passed through the House, the Gianforte-Jones bill was twice amended to offer more relief to low and moderate-value homes. Notably, it also picked up a coordinating clause that would trigger even more relief for those properties if HB 154 — the Democratic tax credit bill — doesn’t make it to the governor’s desk.
In its final House vote Thursday, the Gianforte-Jones bill picked up split-caucus support from 43 of the 58 House Republicans and 25 of 42 Democrats, a 68-30 overall margin.
Of course, it’s far from clear at this point what will happen to the bills in the Senate. A faction of moderate Senate Republicans has repeatedly bucked Regier’s leadership to side with Democrats on key votes in recent weeks (among them Medicaid expansion renewal). It’s a coalition that could keep one or both of the Democratic bills in the mix or advance the Gianforte-Jones bill over Regier’s objections. But, as they say in the world of private-sector investing: ”Past performance is no guarantee of future results.”
And then, of course, there’s the matter of Gianforte’s veto pen. The governor has repeatedly expressed opposition to using income tax dollars to solve property tax angst, though, at a press conference this week, he declined to directly answer a question about whether he’d sign Democrats’ income tax credit if it comes to his desk. He did, however, seem to acknowledge the unexpected-bedfellows politics that seem to have tangled the sheets around his now-bipartisan property tax relief push.
“Bills take very peculiar and circuitous routes as they make it to my desk,” Gianforte said, “so I’m going to reserve judgment on all the bills until I see the final form.”
—Eric Dietrich
About those coordination clauses
Among the key differences between the Montana Legislature and the U.S. Congress is that, while most federal lawmaking is done via sprawling legislative packages that bundle together provisions addressing a wide variety of topics, the Montana Constitution generally limits state lawmakers to bills that address only “one subject, clearly expressed in its title.”
In theory, that single-subject rule ensures that each bill put before the Legislature lives or dies on its individual merits. In practice, of course, legislators looking to secure the support necessary to advance their priorities inevitably resort to horse-trading.
Evidence of that dealmaking sometimes ends up explicitly written into bills via what are known as coordination clauses, as is the case with the current version of Republican Gov. Greg Gianforte’s signature property tax relief proposal, House Bill 231. A section there, added by the House Appropriations Committee as part of an amendment that helped win the bill Democratic votes, now explicitly ties its final form to the outcome of another measure, Democrats’ House Bill 154:
Similar coordination clauses were used during the 2023 Legislature to bundle six bills into a massive tax cut and rebate package passed by Gianforte and legislative Republicans over opposition from minority Democrats.
The bills in the package, dubbed “the six-pack” by its supporters, were tied together with coordination clauses that would have scaled them back by half if any component of the package had been voted down en route to the governor’s desk — an ultimately successful effort to maintain united support from the Legislature’s sometimes-fractious GOP majority.
Back in 2023, Democrats protested the bundling technique, saying it kept lawmakers from considering each bill on its independent merits.
“With this type of a deal where they’re all tied together and they all go or none of ’em goes, what happens is the public doesn’t have the input they need to have,” Rep. Mary Caferro, D-Helena, argued during one debate on the House floor.
This year, though, Democrats are cut in on the tax relief deal — and singing a different tune. Asked about the arrangement at a press briefing this week, House Minority Leader Katie Sullivan, acknowledged the dynamic as “confusing,” but defended the approach as a way for Democrats to advance one of their policy goals — providing direct relief to renters in addition to property owners — via the tax credit bill.
“We understand that it’s confusing,” Sullivan said. ”We really are just trying to move more than just one bill through this process and continue a conversation. And sometimes we do weird things to make that happen.”
—Eric Dietrich
