Rep. Jopek says Senate must fund programs in property tax mitigation bill

by CHARLES S. JOHNSON

The chief sponsor of the lone remaining property tax mitigation bill vowed Tuesday that he will try to kill it if the Montana Senate doesn’t better fund programs to help the elderly, the poor and disabled veterans with their tax bills.

“I am willing to advocate for the bill being tabled if we’re not committed to the programs,” Rep. Mike Jopek, D-Whitefish, told the Senate Taxation Committee. “That’s a big statement because that throws us into chaos and that throws us into a special session. Nobody wants that.”

Jopek said he can quickly turn into a “tenacious opponent” of the bill if necessary. However, that doesn’t need to happen, he said, because the money is there to adequately fund these programs in House Bill 658.

Senate Taxation Chairman Jeff Essmann, R-Billings, a co-sponsor of HB658, said he’d had high hopes that “we’d be moving closer to resolution” - until he heard the Whitefish lawmaker’s comments.

HB658 passed the House 79-20.

“In addition to the bill you brought us today, you also brought us kind of an ultimatum and a hand grenade,” Essmann said. “I would like to ask you when you plan to pull the pin.”

“This is your bill now,” Jopek said. “My support for the bill hinges on the enhancement of the existing circuit-breakers. I think our economic times warrant it.”

HB658 is intended to protect homeowners from the financial sting of the latest statewide property reappraisal by the state Revenue Department.

Property values on residential property rose by 55 percent on average, cumulatively, statewide from January 2002 through June 2008. Average increases vary widely by county and within counties and do not necessarily translate into higher property taxes, depending on what the Legislature winds up doing.

Essmann expressed concern that HB658 is not “revenue neutral” and is already nearly $60 million out of balance, even before the amendments Jopek wants.

Jopek, however, said the Legislature’s first priority ought to be to look after homeowners like Agnes, Gladys, Edith and Edna, four women who moved to Whitefish 40-50 years ago and bought homes. They have seen their property values escalate rapidly because of the city’s accelerated growth, and they now struggle with their property taxes.

“There’s $200 million to $400 million under the mattress,” Jopek said, referring to the state’s general fund budget surplus. “Take the money out of the mattress and give it to them (homeowners).”

Jopek said he’s seen many bills come before the House Taxation Committee this session seeking tax breaks for business equipment, pipelines and even earned-income tax credits for the working poor. Yet no one worries about revenue neutrality when these bills are before the committee.

“Revenue neutrality - what a crock!” Jopek said. “Things are never revenue neutral till the final day when we pick the winners and losers. Somebody wins and somebody loses. Agnes and Edna deserve to win. Put them up front.”

Later, Essmann questioned whether the money would be available “under the mattress” as Jopek said it would be.

“The money may not be under the mattress,” Essmann said. “The revenue estimate has been bleeding $30 million to

$40 million a month since November. If that rate continues, we’ll chew that ending-fund balance in eight or 10 months. I think we’re pretending there’s money under the mattress.”

The committee intends to begin working on the bill Wednesday afternoon.

Here is a quick look at how House Bill 658, the lone-remaining property reappraisal mitigation bill, would affect the state and selected counties with the mitigation implemented, according to the state Revenue Department.

The bill is still being acted on and is subject to being amended as it goes to the Senate, so the final numbers when this bill passes may differ significantly.

The figures used compare the property taxes paid in tax year 2008 with those of the final year of the proposed phase-in in 2014.

Flathead County

Increases: More than 18,200 homeowners, or 57.6 percent, would see increased property taxes, with 6,600, or 21 percent, facing increases of more than 21 percent. Nearly 2,000 homeowners, or 6.2 percent, see more than $500 increases in property tax increases.

Decreases: Nearly 13,500 homeowners, or 42.4 percent, would see decreases in property taxes, including 5,500 homeowners, or 17.1 percent, who would see more than a 21 percent reduction in their property tax liability. More than 1,200, or 3.9 percent, would see more than a $500 cut in property taxes.

Lake County

Increases: More than 4,100 homeowners, or 48.2 percent, would face increases in tax liability, including 1,285, or 15 percent, whose tax liability would rise by more than 21 percent. Nearly 300 homeowners, or 3.3 percent, would see property tax increase topping $500.

Decreases: More than 4,400 homeowners, or 51.8 percent, would see decreases in their property taxes, including nearly 2,000, or 22.9 percent, whose decreases would increase 21 percent. About 400 homeowners, or 4.8 percent, would see more than a $500 cut in property taxes.

Missoula County

Increases: More than 19,000 homeowners, or 58.4 percent, would see increases in their tax liability, including nearly 3,500, or 10.6 percent, with tax liabilities topping 21 percent. More than 1,400, or 4.4 percent, would see more than $500 increases in property taxes.

Decreases: About 13,550 homeowners, or 41.6 percent, would see property tax decreases, including 5,000 or 15.4 percent, with tax cuts topping 21 percent. Slightly more than 1,000 or 3.2 percent would see tax cuts exceeding $500.