Tax re-appraisal is top issue

The Revenue and Transportation Interim Committee (RTIC) has the charter to recommend legislation to correct the deficiencies in the re-appraisal process and results of the 2008 reappraisal of residential, commercial and agriculture properties. The committee’s final report and recommendations for legislation are critical to the voters in the Nov. 2 election since candidates from both parties are listing property-tax reform as a priority; however, the report will not be released until after Nov. 19.

My observation, based on the last two meetings, is that the RTIC main body and the Commercial and Residential Re-appraisal Sub- committee have decided to do little to alleviate our common concern that we are paying too much property tax because of the inaccuracy of the 2008 re-appraisal and the lag of value caused by the 6-year phase-in.

There will be no interim re-appraisal, and the only way an owner can get a one-time reduction in market value is to hire a professional appraiser and submit the data to the Department of Revenue for approval. If a reduction is granted, the tax rate of the complaining owner will be adjusted for the remainder of the cycle.

The impact of “do nothing” is that everyone’s taxes — commercial, residential and agriculture — in the county and districts will go up because of the mill increase required to compensate for the shortfall of planned revenue due to the errors in re-appraised market value, AB26 corrections and approved private re-appraisal reductions. That is, any taxable value decrease from the 2009 Legislature budget has to be compensated for by mill increase.

You should know that the Extended Property Tax Assistance Program (EPTAP) works the same way. That is, the decrease in taxable value caused by the reduction of tax rate to limit the taxable value increase to six percent is offset by an increase in mills, so everybody pays more tax and the state pays nothing for their generosity. Obviously, this policy is a violation of the constitutional requirement for everyone to be treated equally.

The committee considered going to an annual re-appraisal but, on the recommendation of the Department of Revenue, decided not to consider that approach until after the 2014 scheduled re-appraisal. This decision was made after the Department presented an analysis showing that equalization never occurs during phase-in and demonstrates that phase-in violates the Montana Constitution requirement for equalization of assessed value. (There is also a contention of the Montana Residents for Fair Property Tax (MRFPT) group that shows phase-in of properties that reduce in taxable value is also unconstitutional, a fact known but ignored by the Department).

The people of Flathead and Lake counties cannot any longer accept this “don’t care” about the re-appraisal problems of Flathead Valley or the residents of the other four “resort areas”! MRFPT intends to file a lawsuit, but it will be about two years before it is settled. In the meantime, unless we force a change through the 2011 Legislature, we will be paying taxes that are unnecessarily high because of an out-of-date property tax system.

What can you do? We are all aware our local legislators have listened to our plight in town meetings, and all have promised to promote legislation to remedy our situation. We should hold them to that commitment; but in order to do that, they must be in office. MRFPT is endorsing the legislators that participated in the town hall, have a thorough understanding of the property tax system and its impact on individuals: Verdell Jackson, Jon Sonju, Scott Reichner, Mark Blasdel, Janna Taylor, Bill Beck, Keith Regier and Jerry O’Neil.

MRFPT also recommends Derek Skees, Randy Brodehl and Steve Lavin. All of these candidates have promised re-appraisal property tax reform. Let us give them a chance to prove themselves.

Dud Mahler, of Whitefish, is a member of Montana Residents for Fair Property Tax.