New appraisals expected to affect property taxes
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HELENA — At the Revenue and Transportation Interim Committee meeting last month we discussed one of everyone’s least favorite topics, property taxes. Six years have passed since the top-of-the-bubble 2008 appraisals.
The new appraisals will be based on the value of our property as of January 1, 2014. According to the Director of the Department of Revenue, most residential property has returned to the 2008 level. There are a couple of exceptions; the northeast and Billings values have sky-rocketed, and in Missoula, they are down nearly five percent.
It will take the department about a year to complete their assessments, so we will see our statements at this time next year. We will have preliminary data this fall. Last legislative session we were unable to agree on a bill to reduce the six-year cycle to one or two years. You may remember that I was worried about the aerial evaluation system. Too much like spying, but I think it is the wave of the future.
I have not been able to get an answer to the question: will Governor Bullock ask for no net increase in property tax like our last governor did? There will still be winners and losers, just like last time, but this might help most of us.
The main problem will be with agricultural appraisals. Agriculture taxes are based on production, and commodities have risen sharply. I expect our ag producers to be pretty upset.
Our system pits residential against commercial against agricultural against forest land. Compared with other states Montana ranks about in the middle for property taxes. But we rank second from the bottom in average income.
With no sales tax we have to realize that income and property taxes have to support our state. Only about 30 percent of property taxes go to the state, most for schools, and the rest supports the county.
Now for revenue. Besides the federal dollars the state receives, individual income tax is our main source of funding. Collections are coming in as expected. Looks like we will have a surplus similar to the beginning of last session.
But there is still some concern. Corporate taxes are way down so far. We will know the whole story after April 15. Also, the legislative fiscal staff uses information from forecasting experts. They say much like we all say; slow growth.
But they just sent out a revision. The gross domestic product (GDP) projections are down. Why? Bad weather, Obamacare, slow car sales and weaker exports. Also, in the next few years they project the price of a barrel of oil will fall below $100.
By the way, you pay your state employees very well. Not school, state. The average salary of executive branch employees is $45,360. The real money is in benefits — retirement and healthcare total an average of $17,000 per year. Remember that most benefits are not taxed. Guess that’s why Obamacare wants the value of Cadillac health plans listed on our taxes next year.
This is the 100-year anniversary of women’s suffrage in Montana, six full years before the 14th amendment to the constitution. And it is the 97th anniversary of the election of the first woman to the U.S. Congress, Republican and pacifist, Jeanette Rankin from Montana.
Please call me with any questions or comments. My cell number is (406) 253-8766, or email jannataylor@montana.com. Never forget that I work for you.
