HELENA – Democrats in the Montana Legislature said a tax shift in the state has put too much pressure on residential property taxpayers, and they want to put forward a plan to change that problem.

“We believe it is important to bring a proposal to the table that we know will create a fairer tax system and give working Montanans a break,” said Senator Pat Flowers (D-Belgrade), Senate Minority Leader.

In a press conference Monday at the State Capitol, Flowers and Rep. Jonathan Karlen (D-Missoula) announced three bills they are proposing for the 2025 legislative session:

The first option would be to create a “property tax exemption” that exempts the first $50,000 of the value of a home and the first $200,000 of the value of a small business from taxation.
The second option would be to reform property tax rates by introducing several tax brackets based on property value, so that higher tax rates would apply to more expensive properties.
The third option would be to create a “Housing Fairness Tax Credit,” similar to an idea Karlen introduced during the 2021 session. It would offset a portion of eligible residents’ property taxes if they exceed a certain percentage of the owner’s income.

“Montana residents are unable to control skyrocketing housing prices and as a result, working families and seniors are being pushed out of their homes and communities,” Karlen said.

Democrats estimated the overall plan would cut residential property taxes by $214 million and small business taxes by another $14 million. Flowers said they would partially make up the difference by rolling back $100 million worth of “tax giveaways to big corporations.”

Democrats said the changes are unlikely to have a significant impact on city, county or school district revenues because of local governments' ability to adjust their tax levies.

As the minority party in the legislature, Democrats have blamed Governor Greg Gianforte and the Republican majority for not doing more to provide long-term property tax relief in the last session.

“We knew it was coming, we knew how to stop it, and they did nothing,” Flowers said.

Republicans have touted the millions of dollars in property tax refunds they approved in 2023 that will also be available to homeowners this year. Gianforte has also assembled a task force to study longer-term responses to rising property taxes. They are expected to submit a report with recommendations to Gianforte next month.

“While some Democratic politicians are putting on a show with press conferences and Twitter videos, Governor Gianforte is delivering solutions to the problems facing hard-working Montanans, including Biden's fiscal crisis,” Sean Southard, Gianforte's communications director, said in a statement. “The Governor is encouraged by the progress of the bipartisan property tax task force he created, particularly discussions on limiting the growth of local spending that leads to property tax increases and providing a property tax exemption for Montana residents to ensure out-of-towners who own second homes in Montana pay their fair share for our law enforcement, schools, and roads and bridges.”