Fern advocates for fair property tax system

The Tax Foundation, a right of center of tax analysis think tank in Washington D.C. It ranks Montana sixth best in the nation in their State Business Tax Climate Index survey. Montana has retained this ranking for several consecutive years. 

This is potential good news for attracting new business and residents to our state but data can also be deceiving. Over the past two decades a minority of homeowners in various parts of the state have been exposed to the regressive side of our property tax, (the Foundation ranks our property tax eighth in the nation in terms of least onerous), facing the impact of rapidly escalating appraisals with incomes that simply can’t keep pace with the property taxes assessed.

For people living in cities like Great Falls, Butte or Miles City, such a problem may seem very farfetched. The housing market inventory along with overall growth patterns have not caused the tax to become regressive in nature (a disproportional burden placed on lower income people).

Two sessions ago I testified in favor of a tax circuit breaker bill that would provide expanded rebates to homeowners. (It did’nt pass). Currently, only a limited number of people (generally low income elderly and, or very low income), qualify for a circuit breaker. The circuit breaker is a tool used in many states to establish a relationship between income and property tax.

For example, consider an individual couple retired, in a home and property they’ve owned their entire adulthood. Before Whitefish was discovered and the market drove prices beyond the reach of most of our existing citizenry, this couple had an affordable tax. At it’s height of taxable value, the said property and house reached an annual (and current), assessment of $20,000. The owners were living on social security and investments which totaled $50,000 annually with expectations that savings would last into old age. Surely, no person should be forced from their house, for no fault of their own.

Many people do not look at their homes as a commodity. They simply want to retain residency through their old age and if allowed to, die in their beloved home passing it on to the next generation.

An effective circuit breaker mitigates all or some of this problem through state refunds. In Montana, people in these situations often go under the statistical radar. New Jersey, with the highest property tax burden in the nation must use liberal amounts of the circuit breaker to maintain some degree of stability.

A few decades ago, the Montana legislature played (and passed for two years), with the concept that the property part of the tax could not exceed 75 percent of the appraisal of the house. This short live mechanism resulted in some consternation to our friends with fewer mountains and greater horizons, and the bill met an untimely death in a subsequent session.

I may be the wrong person in the Legislature (if elected) to propose such ideas as Whitefish seems to victimized by envy and the misperception that we are all trust fund beneficiaries. However, I will do my due diligence to advocate for all citizens burdened by regressive taxes within a system that suggests the opposite.

Both Republican and Democrats like myself ought to recognize the great injustice that has been placed on many homeowners in Whitefish through a glitch in the system, and work to remedy the inequity.

— Dave Fern is a Democratic candidate for House District 5