The Short-Sighted $100 Million Dollar Homeowner Rebate Scheme

by lizard

Opposing the burden of paying taxes is an American tradition, going back to the origins of our independence. From the national conversation about the economy to the state’s legislative wrangling, questions of who pays and how much have become central in the debates over how to move our economy forward.

Montana state Republicans have two bills about taxes moving through the bowels of Helena:

One is House Bill 230 by Rep. Scott Reichner, R-Bigfork, which would cut the statewide school equalization property tax levy to 19.6 mills from the current 40 mills. It would cut property taxes for individuals and businesses by $50 million a year.

The other is HB472 by Rep. Jerry Bennett, R-Libby, for the Montana Chamber of Commerce to exempt the first $250,000 of business equipment from property taxes. Because it’s an exemption, businesses with more than $250,000 worth of equipment would be able to deduct the first $250,000 from the total value of their equipment.

As a state, we are able to talk about cutting taxes because we are one of only three states in the entire country with a budget surplus. And instead of long-term planning in uncertain times, both Republicans and Democrats are advocating for short-sighted measures.

Steve Bullock and MT Democrats are pushing for a $400 dollar rebate to property owners. Back in December, Bullock had this to say:

“We have a balanced budget and lower unemployment than many other states, and we turn around permits in many areas faster than our neighbors,” Bullock said.

He suggested that Montanans ought to be wary of making major changes threatening Montana’s fiscal stability.

“So let’s be a little bit skeptical, and let’s proceed cautiously when we hear of those that want to use that surplus and that sound fiscal management as the excuse to dismantle what I think is a pretty darn good system that exists in Montana,” Bullock said.

When Montana has more revenue than it needs, Bullock suggested finding ways to return it to Montanans.

He touted his plan to give one-time $400 property tax rebates to Montana residents living in their own homes. The program, which mirrors the one passed in 2007 at Gov. Brian Schweitzer’s urging, would cost $100 million.

Of course Democrats are going to be super eager to get this done, and of course Republicans are going to try and keep it from happening. Politics is all about the next election cycle, and giving property owners a $100 million dollar payoff for electing Democrats will be a great talking point for the next round of elections.

But in these uncertain times, is it smart policy?

A few days ago, a report on the cost of fighting fires looked at the potential of that cost doubling as houses continue to get built in the wild land/urban interface.

That is just one example. We also have a federal government in total disarray, putting any federal dollars we rely on at the state level in question.

I’m probably in the extreme minority when I say I don’t want a $100 million dollar payoff. I know it’s probably unrealistic to ask our state representatives to think and plan for the uncertain economic realities we will continue to face as a state, but that is exactly what I think they should be doing.

But that’s not what the conversation is about. If last night’s tweets from state rep. Bryce Bennett is any indication, the debate is about Democrats wanting to put $400 dollars in your pocket, while Republicans want to give you just $44 bucks.


  1. Dimitry Orlov discusses short termism versus long term planning. http://cluborlov.blogspot.ca/2013/02/monkey-trap-nation.html#more

    • Steve W

      That’s a very interesting piece on how technologically backwards we are as a country compared to the Russians. I imagine a lot of people might have a hard time getting their heads around that since we have been trained to believe that we are on the for front of innovation and efficiency.

      Thanks for sharing, FC

    • lizard19

      that is damn interesting, thank you fcof.

  2. Steve W

    Liz, for a number of years the legislature kept cutting state aid to schools and that has then to be made up at the local level through higher property taxes.

    Instead of a one time rebate we need the state to renew it’s long term commitment to school funding and to lower local property taxes over the long haul.

    It’s a much fairer and progressive system of funding (the state graduated income tax) than property taxes are, since property taxes have little relationship to the financial ability to pay those taxes.

  3. JC

    I second that, Steve W. Property taxes being paid now were based on property valuations assessed during the housing boom/bubble.

    Values today have little relationship to assessed values. I couldn’t sell my place up her on the res for 60% of what it was assessed for in 2008, but I’m sure paying taxes on that inflated value. And there isn’t any way to challenge appraisals outside of a short window of time after they occur. and they only reappraise every 6 years, phasing in 1/6 of the increase every year. So while my assessed value is still raising, along with my taxes, my property values are still declining, and have for the last 5 years.

    Stupid system.

  4. Jack Ruby

    Ill take the $400.

    • lizard19

      and what are you going to do with it, Jack? will the money stay in Montana?

      • Jack Ruby

        It would probably go to a variety of sources, some of which would stay in Montana at least on the first cycling of the dollars. I’d probably buy some locally grown organic produce at my locally owned organic food store, buy some diapers at a local big box retailer and send the rest to the large bank that services my student loans. As a middle class homeowner I have no problem taking a tax break if the local or federal government is going to offer me one. Im not going to go down and lobby for it or claim I ‘need’ it, but our increasingly regressive overall tax structure has put more of the overall burden on people like myself so if they want to give some back Ill take it. It probably would be more prudent for the legislature to keep it for the rainy days ill grant you that but im not above having the democrats grease my palm either.

  5. Crow

    The Democrats proposal is a shameless attempt at buying off the low information voters for $400 a piece. But the Democrats miscalculated in that the rebate only applies to homeowners and many in the low information crowd won’t receive the $400 bribe. If the Republicans are smart, they’d point out that renters and businesses get nothing more than a kick in the shins in Bullock’s scheme.

    • lizard19

      Bryce Bennett tweeted this:

      Montana Dems are supporting BOTH homeowners and renters with HB 361 and SB 318. It’s not mutually exclusive. #MTLeg

      I haven’t had time to look into what’s in the cookie jar for renters.

    • Jack Ruby

      Bullock and the dems are handing out bribes??? Where do i line up to get my free shit? They ran out of Obama money before i could get mine.




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