Property taxes mitigated by House bill

Within the next couple weeks, all property tax owners in the state of Montana will receive their new property value assessment notice from the Montana Department of Revenue. There will be bad news and good news.

The bad news is that since the last general appraisal of property in the state in 2002, average residential property values have increased by 73 percent in Flathead County and 55 percent statewide; commercial property values increased by 35 percent; agricultural values increased by 34 percent; and forest lands increased by 46 percent.

If these values were placed on the tax rolls and factored with the current mill levies, there would be a huge increase in property taxes to a vast majority of property owners in the state. An estimate by the Revenue Department is that without mitigation, the new appraisal would result in $47 million in more tax revenue flowing into the coffers of state and local governments.

With hard work and perseverance, a slender majority of the members of the 2009 Legislature were able to beat back efforts by the administration and liberal legislators to allow the increased tax burden to move forward and to use the increased revenue to grow government.

The conservatives were successful in mitigating the effect of reappraisal so increased valuations did not result in a tax revenue windfall for the government. As enacted, House Bill 658 embodied these two goals — property tax mitigation and revenue-neutrality. The final vote on the House floor was 57-43. The governor allowed the bill to become law without his signature.

Since the statewide average increase for residential property values was 55 percent, the mitigation measures were pegged to this percentage. Residential property that increased in value greater than 55 percent in the period from 2002 to July 1, 2008, may see increased tax levels, depending on where your county commissioners set the local mill levies.

Calculation of taxes requires three factors — the assessed valuation of property, the exemption amount and the tax rate. The final bill that I supported — HB 658 — incorporates the increased valuations determined by the Revenue Department but increases the amount of the property exemption and reduces the rate of taxation. This mitigation means that in a large majority of cases, the increased valuation of reappraisal will not result in higher taxes.

Taxpayers also need to know that they have available to them several avenues to appeal their property value assessment contained in the notices they will receive. An easy and informal way to contest your assessment is to fill out Form AB-26, which you can request from the Revenue Department, Flathead County Property Assessor (phone 758-5700). It is also available online at the Department of Revenue Web site.

It's important to note that the informal AB-26 process must be initiated within 30 days of the receipt of the new assessment notice. Once it is filed, the county assessor's office will schedule an appointment to review the factors that they believe support the value placed on your property, as well as discuss comparable properties where they have used a market valuation. You will also be given an opportunity to explain factors that you believe weigh against the department's valuation.

If you are not satisfied with the result of the informal meeting with the assessment division, you may then initiate a review by the local county tax appeal board. This must be filed within 30 days of receiving the decision from the assessment division. Forms to initiate the appeal should be available from the clerk and recorder at your county courthouse or by going to the State Tax Appeal Board's Web site.

The appeals at these levels are designed to be informal and do not require the services of an attorney or accountant. The county tax appeal board is composed of citizens who are not employed by the Revenue Department and should be familiar with local factors that affect valuation.

There also are levels of appeal to the State Tax Appeal Board and even to the Montana Supreme Court. But if you have questions about the valuation notice you receive, hopefully they can be resolved at either of the two local levels.

The Montana Constitution mandates that the state periodically reappraise all property in the state in order to keep values equalized and current. In passing House Bill 658, the majority of the Legislature met the constitutional requirement and mitigated the increase by reducing tax rates and increasing exemptions. We did our job as fairly and equitably as we could.

The new appraisal value of your properties is where the rubber meets the road. If the assessment value of your property exceeds the fair market value for your area, do not hesitate to use the remedies that are at your disposal as a citizen of Montana.

Bruce Tutvedt, R-Kalispell, represents Senate District 3, rural Whitefish.