Montana Senate Bill SB542

Montana 2023 Regular Session

• Introduced: 3/24/23
• Refer: 3/27/23

Caption

Constitutional amendment to limit property values and property taxes

Impact

This legislative proposal is significant as it directly addresses the concerns surrounding rising property tax burdens and aims to provide financial relief to property owners. If enacted, the new regulation would fundamentally alter how property taxes are assessed in Montana, potentially leading to lower taxes for homeowners and business owners alike. This could lead to greater stability for property owners, especially in areas with rising real estate values, and could also have implications for local governments that rely on property tax revenues to fund essential services and infrastructure.

Summary

Senate Bill 542 proposes a constitutional amendment to limit the assessed value of real property and the property taxes that can be levied against it in Montana. The bill aims to amend Article VIII, Section 3 of the Montana Constitution, which governs property taxation. Under the proposed amendment, the base valuation for real property will be set at the amount assessed as of December 31, 2019, with limits on future increases of assessed valuation to a maximum of 2 percent, barring certain circumstances including significant improvements or changes in ownership. Furthermore, ad valorem taxes cannot exceed 1 percent of this property valuation.

Contention

Among the points of contention are the possible consequences for local government funding, as a reduction in property tax revenues could necessitate cuts in public services. Critics argue that limiting property tax assessments and liabilities may create long-term budgetary issues for communities relying on these funds for schools, emergency services, and infrastructure maintenance. Proponents, however, argue that the bill protects homeowners from excessive taxation in a fluctuating real estate market, ensuring that taxation is fair and predictable.