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Agenda - 01/11/03

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Governor’s Property Tax Reappraisal Advisory Council Meeting

Note:  Reports and other materials from this meeting are available by request.  Please contact Cynthia Piearson, Department of Revenue, at (406) 444-6700 or

Jan. 11, 2003



Chairman Senator Bob Story
Vice Chairman Kurt Alme
Representative John Brueggemann
Representative Gary Branae
Ward Ernst


Senator Emily Stonington
Nick Hogan
Susan Humbolt

Department of Revenue Staff Present:

Judy Paynter, Tax Policy and Research Process Lead
Brad Simshaw, Principal Tax Policy Analyst
Ryan Jose, Tax Policy Analyst
Marla Tilton, Administrative Assistant


Senator Bob DePratu
Representative Jim Peterson
Representative Ron Devlin
Representative Carl Waitschies


The information base is the material prepared for the Council.  The only handouts referred to are those given in addition to the basic Council materials.

The meeting was called to order at 9:05 am and roll call was taken.

Chairman Bob Story opened the meeting and reviewed the history of the Council meetings.  Chairman Story noted that during the meeting on December 20, 2002, the Council moved to make one recommendation to the Governor and may have several more during the final meeting today.  The first recommendation was to prepare to do the traditional adjustments that have been done in the past, which are rate and exemption adjustments.  The first motion is as follows:

The Council recommends an adjustment to decrease the tax rate from 3.46% to 3.00%, increase the homestead exemption from 31% to 34%, and increase the comstead from 13% to 15% along with the current law phase-in of the January 1, 2003 appraisal values.

Brad Simshaw, Department of Revenue, gave his report on Further Analysis of Preliminary Reappraisal Valuations.  The Council discussed points in the report.

Chairman Bob Story asked for further explanation of the chart on page 5 using Madison County as an example.  He noted that the improvement change in tax liability shows 12.6% and the land change in tax liability was 13.98% and the dollar amounts are $114.46 for improvement and only $11.72 for land.  Chairman Story wanted to understand the large dollar difference between improvement and land.  Brad Simshaw responded that this suggests the improvement value in Madison County compared to land value is about 10 times more on an average.  The ratio of the land value to the improvement value is greater in some counties than others.

Representative Ron Devlin used Sweet Grass County as an example and asked for further clarification of what the $172.99 increase in the chart on page 5 represents.  Brad Simshaw responded that the $172.99 represented what the average increase for the improvement and land property tax liabilities would be if reappraisal were phased-in over the next 6 years.  Judy Paynter added that this increase would be due to reappraisal and does not reflect what may occur due to changes in mills due to budget changes.  The mills reflected in this report assume that local governments would hold the property tax dollars in their budgets steady.

Chairman Bob Story commented that with the chart on page 7, where the numbers start going negative, those revenues have to be picked up by other property taxpayers in the county.  Brad Simshaw responded that all taxpayers in all the tax classes would make up this money.

Dud Mahler, citizen from Whitefish, looking at the information on page 8 in the appendix, asked what allows an increase in the number of people that had decreases in taxes and lowers the number of people that had increases?  Brad Simshaw responded that it is a comparison of the top chart to the bottom chart on page 8.  Chairman Bob Story added that if we did nothing, we would have an increase in revenue under current law.  Basically, we are taking a potential increase in revenue and backing out state revenue, and local government and school revenue, by adjusting the taxable value.  Approximately the same revenue is collected.  Dud Mahler said it seems that the property owners who will get increases, get lower increases.  Chairman Story responded that the people who get increases under the Council’s recommendation get lower increases than they would under current law.  Under the Council’s recommendation, the revenue paid by taxpayers who get an increase is offset by the revenue lost from taxpayers who get a decrease, and the state collects slightly less money on the 95 and 6 mill levies.

Representative Jim Peterson asked if this would be done by increasing the exemption and lowering the taxes.  Brad Simshaw responded that decreasing the tax rate from 3.46% to 3.00% would in a sense take them back to current law levels.  The tax rate applied to agriculture land mitigates the average increase of 15% due to reappraisal.

Dud Mahler, citizen from Whitefish, questioned the total number of dollars paid by the people that are paying total taxes, and asked if the burden shifted to that same number of people who are on the other side?  Chairman Story responded that if we look at the last chart on page 7, it would be seen that in every county within the residential property class there are some homeowners paying more and some paying less.  Once you get to Roosevelt County, the ones paying less accumulatively, pay less than the ones paying more so that the homeowners in the whole of all those counties pay fewer taxes.  Dud Mahler added that the burden seems to shift to those people who had the increase.  Chairman Story added that some of it shifts to other classes, such as business equipment, centrally assessed utilities, railroads and other classes of properties.

Harold Lockhart, citizen from Whitefish, asked how close the estimates were to reality.  Chairman Story responded that these are estimates and any changes would be due to new construction.

Brad Simshaw informed the Council and audience of corrections on pages 10 and 11 where reference to the year 2003 should be 2002.

Harold Lockhart, citizen from Whitefish, asked what criteria was used in creating the tables on page 11.  Brad Simshaw responded that the criteria used in this group was selected by having at least a 25% increase in liability and that increase had to be $500 or greater.  Therefore, the criteria eliminates those that had a 25% or greater increase but that increase was only $100.  It also eliminates those that may have had a $600 increase but that increase was only a 10% increase in liability.

Ward Ernst asked if the Council were to recommend a homestead split between land and improvements, would this be feasible administratively?  Brad Simshaw responded that there would be no problem with the computer system in the offices of the Department of Revenue.

Chairman Bob Story opened the meeting for further discussion.

Representative John Brueggeman commented that he was interested in acquisition value and would also like to see the land exemption go up.

Representative Gary Branae commented that he would like the Council to look further into acquisition value.

Ward Ernst commented that he was not convinced that acquisition value was the answer, especially in a long-term situation.  Ward added that he did like the splitting of the land and residential property.

Kurt Alme pointed out that the Council asked the Department of Revenue staff to come back with more research data on the valuation methodology.  If we stay with the same valuation methodology we’ve been using, what does it look like for folks who are seeing big increases?  Where are they located, what are their situations, and are there land improvements issues?  Kurt added that we expected land improvements to be the major cause statewide, but it turned out to be more of a mix.  Kurt Alme asked if there was another methodology the Council needed to use.  Is there a land cap style methodology or is there something we can do by lining out the interests we are trying to protect, one being the ability to pay?

Chairman Bob Story added that we start having a two-track system in the legislature.  One is to move to acquisition value, which has been tried before and somewhat difficult to do.  The other one is to use the traditional approach and set up systems for those people who need help. 

Mike Gustafson, citizen of Billings, commented that we are shifting the taxes back and forth between improvements and land.  He added that we have to recognize this state is going through a major change.  We may have to take a look at the whole property tax system.

Dud Mahler, citizen of Whitefish, commented that what we are talking about doing is band-aiding the current system.  We will be in the same place, doing the same thing six years from now.  It just makes sense that we look at overall property tax reform now.  If we don’t do something now, we’ll face it next year and end up needing tax reductions.  Right now we can make a tax revenue neutral tax reform bill.  The models for coming up with tax reform exist.  There are many other states that have done this, so why can’t Montana?  He would suggest we change our policy of property taxation to say we are going to have a fixed budget and we will count for increases and decreases in property, but we are going to make it revenue neutral all the time.  Property will be reappraised, but if the increase of the assessed value is limited to that amount that has decreased throughout the state, then the problem has been solved.  This requires changing the thought process.  He thinks acquisition value is the way to go, but if we decide that is not the way to go, then we can do it within the current system.  He recommends following the example of Michigan, where they reassess on a regular cycle and limit the assessed value increase to 2% or CPI.

Ward Ernst asked Mr. Mahler if he was saying that we should throw out market values?  Dud Mahler responded no because we need market values.  Mr. Mahler suggested that if we reassess, then market value would increase.  Next is the homestead exemption, fix so you limit the assessed value increase to 2% a year or CPI.  If that rate is held until the property is sold and then increased for the new buyer, the taxes will be very fair.

Jim Stack, citizen from Whitefish, commended the Department of Revenue for coming up with the idea of the landstead exemption, something to help ease the impact.  Mr. Stack added that the problem with the landstead exemption is that after doing a search on the Internet, nothing came back.  We are really struggling to try to put a band-aid on top of a band-aid.  We have the comstead exemption for commercial class and the homestead exemption for residential.  Now we are going to do a landstead exemption.  The newspapers in the state describe our property tax as the most hated tax in Montana and there is a good reason for it because the residents of Montana don’t trust it.  It is totally unpredictable.  The percentages that were done by the Department of Revenue give us a lot of comfort.  Even with the best fix available in the current system, 1 in 13 of the Montana residents have more than a 25% valuation increase; 1 in 75 have more than a 50% increase in valuation.

That can be devastating for retirees.  Mr. Stack said that in his November presentation he laid out the challenge:  fairness, protection, predictability.  Predictability means that Montana residents should have an idea where their property taxes are going to go from one year to the next; however, they don’t.  They live in fear of what the six-year appraisal cycle will do and they even live in fear of what the legislature can do in between these cycles.  Removing the land cap doubled the property taxes for hundreds of property owners in the Flathead area.  We need protection for the retirees and fairness for all Montana residents.  Mr. Stack urged the Council not to do a landstead exemption.  One of his recommendations was an acquisition tax and another was a fixed phase-in with a maximum rate of 2-3% each reappraisal cycle.

Dick Hoefle, resident of Billings, commented in support of Mr. Stack’s recommendations to the Council.

Senator Bob Depratu spoke about acquisition value and some bills that are forthcoming that would address this issue.  Senator Depratu also addressed the perception that we sometimes have that this problem is limited to Whitefish and Flathead County.  The problem now exists statewide.  It exists around lakes statewide, on rivers statewide, out in beautiful countryside, where you aren’t on a river or on a lake but you are near development.  We have seen some huge developments take place in the state that are dramatically increasing properties that have been in families for years.  We also are seeing that this affects more and more people who are elderly and we have to be aware of this.  We are trying to keep our young people in the state.  Our young people are being driven away by all the different forms of taxes, which affect our economic development.  We have to recognize that the ad valorum system really isn’t a system that is working any more.  Just look at the mechanics of administering and implementing the ad valorum tax and reappraisal.   In this state many of our residents feel very strongly about property rights.  We have a tremendous amount of our state where our appraisers can’t even tell what’s being constructed in the rural areas.  They have no idea what they are appraising because they can’t get to the property.  They don’t have permission to come onto the property and they can’t see the property.  We don’t have any idea whether we are taxing or appraising a home at $200,000 or if it should be appraised at $800,000 or a million dollars.  I think there are a lot of inequities caused by this factor alone.  As we go along, we are going to see more and more militancy of property owners not wanting appraisers to come onto their property because they know they are going to get a big property tax break by keeping their property away from the eyes of the appraiser.  He is working along with others on bills to approach acquisition property tax.  He thinks it is a system that can be very beneficial and will address a lot of the issues.  He realizes this is probably about the fourth time in the last ten years that this method of property tax appraisal has been approached, but he believes that in looking back and talking with people that we are addressing many of the issues that have stalled acquisition value in the past.  We are addressing the issues of property owners aged 55 and older, first time homebuyers, and deflating property.  We are addressing the issue of keeping up with inflation by putting in an inflation factor that would raise the valuation annually by the CPI or 2% whichever is greater.

He complimented Brad Simshaw on the work done this morning.  He thinks the work, together with the question Representative Waitschies raised, makes one of the strongest arguments for acquisition-based appraisal possible.  Representative Waitschies said, after we have gone through all of this, it comes down to a policy decision as to which one of these formulas we would take and to which taxpayer we shift the property tax.  Should we shift it to the west where it is high and going up, or should we shift it to the east where sometimes the property taxes are going down?  With acquisition based property tax, that doesn’t happen.  The appraisal is determined by the market place.  We set the appraisal base with our bills; we set the appraisal based on the 2002 appraisal value.  The tax bill received on November 1 is the starting point and then you stay there.  The next year your property tax value will go up a maximum of 2%.  Or, if the property is sold, the property tax value will then go up or down to whatever that purchase price is, and that will be the new value for the property.  It lessens the need for appraisers.  There will always be a need for appraisers for special circumstances.  It is going to be a system that would simplify and make things easier.

He knows there are homes in his area that are in the $6 million range; and legitimately the value is real from the standpoint of what people from outside of Montana are coming in and are willing to invest into a piece of property for a home.  If we look at those appraisals, we will find that those homes are being appraised at about $3 million to $3.5 million.  That means that people from outside of Montana who own most of these homes are walking in here, are not paying any sales tax, are not paying any other tax, and are getting a $2.5 million valuation break on their property taxes.  On the other hand, people in the neighborhood who have had homes that are now worth $1 million, but bought these homes 30 or 40 years ago for only $40,000 or $50,000 see their appraisals are up to $100,000 or $150,000.  Unfortunately those appraisals have to be brought way up, and it is really those folks that don’t want to see this increase.  It was addressed earlier that there are folks who over this two year period, are going to see a 200% increase in their taxes and they were already paying a very high tax.  He would ask that the Council give some serious consideration to getting some recommendation on acquisition value as far as our tax method is concerned.  He believes it has merit.  The legislative taxation committees are seeing tax bills that want to do a lot of different things with other types of taxes in Montana.  In a lot of cases, the end result of these bills passing would be to lower our income tax and lower our property tax.  The people in Montana are saying they want our property tax reduced.  We have also band-aided the income tax over the years because we kept giving exemptions. 

Kurt Alme commented that acquisition value is clearly the big issue for the Council to discuss.  Kurt added the Council should decide what our scope is going to be and how far down that path we are going to go to try to resolve that issue.

Chairman Bob Story commented that our charge is to examine the impact of reappraisal and to recommend policy changes needed to mitigate and address the impact.  He noted that the Council had a motion at the last meeting.  Chairman Story said if the Legislature decides to do traditional things, then the Council has a good starting point.  Some of the groundwork has already been done.  We would expect the Legislature to address those people who have big problems after the standard fix.  We can also state as a council that the ad valorum system has some significant problems and we should look at a replacement property tax system.  We don’t need to draft an acquisition bill because Senator Depratu already has one in the works and the Legislature should give that equal consideration.  The Governor appointed this Council to make a recommendation and the Governor could still make a different recommendation.  The next step may be that the Department of Revenue begins working on the analysis that Senator Depratu would need for his bill.

Ward Ernst asked if the reappraisal was constitutional or law?  Kurt Alme responded that there is no constitutional requirement specifically to reappraise; there is a constitutional requirement for equity.

Ward Ernst thought the acquisition value would be the most equitable way to go with reappraisal.

Chairman Bob Story asked Senator Bob Depratu if his proposal would be dealing with both commercial and residential properties.  Senator Depratu responded that it would deal with both.  Chairman Story asked if both classes would follow the rest of the classes in the average value of annual increase or would we be slowing down the growth of class 4 relative to all the other classes so that a tax shift from residential to all the other classes is created?  Senator Depratu responded that he could not give an answer on that yet.  He added it would be factored in with the CPI or 2%, whichever is higher, starting with the 2002 tax valuation, then it would increase by that factor annually and would continue to do so indefinitely.

Chairman Bob Story asked the Department of Revenue if they could research what the rate of growth would be in all other classes except for class 4.  Brad Simshaw said he would look into the requested information.

Chairman Bob Story commented that in class 4 there would be two things driving the rate of growth, the 2% or CPI, which applies to everybody and the increase that comes every time a house sells so that the rate of growth in class 4 will always be greater.  Senator Bob Depratu responded there would always be a growth that will exceed 2% due to new construction and pricing of housing.

Representative John Brueggeman commented that the Council should recommend a serious policy change and that the Legislature should look at acquisition value.  He also added that some other states had a cap via a phase-in at 1% or 2% and he would be very interested in taking a look at that.  Representative Ron Devlin responded that the 1997 Legislature made an attempt to do that with a phase-in over 50 years, but after a court decision which required valuation decreases to be fully decreased the first year, the 1999 Legislature changed the phase in period for the increases to the reappraisal cycle.

Representative Ron Devlin asked Brad Simshaw if all of class 4 or just residential property contributes 32% of the total property tax.  Brad Simshaw responded that it was the residential property in class 4.  Senator Devlin asked if we freeze values or stabilize them, could there be something done that residential property continues to contribute 32% of the overall tax?  Brad Simshaw responded that we could determine the tax share or tax base directly with the tax rate.  You can determine how much that will be with whatever system alters the market value or acquisition value.

Representative Ron Devlin asked if there was any data from 10 years ago that would tell us the rate of growth in residential property as compared to the other classes of property.  Brad Simshaw responded there was a report from the prior meeting with information.  The historical information of growth in class 4 residential would contain inflationary growth as well as new construction.

Jim Stack, citizen from Whitefish, commented that one of the problems seen in this state are the properties owned by out-of-state residents.  Mr. Stack suggested the Department of Revenue look at the past 3 years of realty transfer certificates with the new 2003 appraisal figures.

Kurt Alme reminded the Council that the issue for review today was the outlier concerns.  The Council did take a look at the landstead, although we didn’t offer a global solution.  The Council should at least articulate a couple of principles that we think are important.  He suggested the Council summarize ideas and potentially adjourn today.

Ward Ernst would like the tax committees to consider separating land and improvements and also have the Legislature look into acquisition value.  Chairman Bob Story reminded Ward Ernst that our charge is to recommend to the Governor also.

Representative John Brueggeman was interested in looking at an example where the land is completely tax-exempt under a landstead and have a 8.4% homestead exemption.  This committee should recommend a cap on the phase-in.  Chairman Bob Story asked for clarification.  Would this capped phase-in be for six years, reappraise and start that phase-in for six years.  Representative John Brueggeman responded yes.  Chairman Story commented residential property reappraisal in a lot of these areas will be equal to or less than 2% a year.  These homes are going to be at full appraisal in two years while other people are never going to reach full reappraisal value.  This is what raises the constitutional issue, but this method can be explored.

Judy Paynter, Department of Revenue, commented that there was a period of time where the department didn’t complete the work on time for the reappraisal cycle and the legislature extended the cycle.   This became a real concern with people whose property values were growing slower because they were paying a higher effective tax or a bigger portion of the property tax revenue than another part of the state where property values were growing much faster, and thus, had a lower effective property tax. This concern resulted in the legislature directing the department to adjust annually valuations annually by a sales assessment ratio.  This eventually lead to a court case and it was determined that a sales assessment ratio adjustment was not legal. 

Representative Gary Branae moved that in addition to the previous motion, the Council express in the final report that they are concerned with the outliers and that there should be a strong look at acquisition as a viable option.

Representative John Brueggeman asked if the motion satisfied Senator Depratu?  Senator Bob Depratu responded that he would like a stronger recommendation.  Chairman Bob Story asked Senator Depratu if he would like the Council to recommend acquisition value but also in the alternative, here is what we can do to fix the system.  Senator Depratu responded that he would very much appreciate a recommendation to the Governor from the Council so that the Governor would give acquisition value the same consideration as the other solutions.

Jim Stack, citizen of Whitefish, commented that if acquisition value got into the legislative taxation committees and started running into strong questions, something to think about is that you are going to have this proposal as a backup.  It is going to be easy to go with just what we’ve gone with before, that is a band-aid, and maybe with another band-aid on top such as the landstead exemption.  You will never get a change, unless you put the substantial proposal out there first and say we have no predictabity, we have no protection.  We recommend that you look at acquisition value.  If that does not meet the Council’s criteria, then here is the recommendation from the Department of Revenue

Representative John Brueggeman suggested three options:

  1. Acquisition Value, a serious long-term policy change
  2. Adjustments to Current Law
    • Option A - Landstead
    • Option B - Simple adjustments, band-aid if you will, to the current ad valorum system which would be represented by the second meeting’smotion.

Chairman Bob Story asked for final clarification of the motion.

Judy Paynter responded that this committee already adopted one motion to deal with current law and along with that motion would be the concern of the outliers and there should be a strong look at the acquisition value as a viable option.

Chairman Bob Story asked for discussion of the motion.

The Council discussed that this expresses acquisition value as a serious long-term policy change and also gives the option on how to adjust the current system by the previous meeting’s motion and the concern about outliers.

Kurt Alme commented that the legislature may go down two different paths.  Take a look at acquisition value; take a look at the current system.  And, if the legislature goes with the current system, how do they address the outliers?  He suggested that we be more specific regarding outliers.  What we are interested in doing is trying to make taxes predictable and affordable for Montana residents.  We want to be careful if we are going to craft some outlier solution.   He agrees with Mr. Stack that he doesn’t think we want to craft it for wealthy non-residents who come in with an understanding of what they are going to pay, even though they may be seeing a substantial tax increase based on the property value.  He is not sure we are also interested in giving a homestead type of exemption or extending these type of exemptions to non-residents who don’t stay here and contribute to our income tax system and our other taxes.  He would like to suggest that we can throw out some different ideas, landstead being one of them.  He thinks we can do phase-in percentages or we can do either one of them or a landcap piece.  The other thing we can do is build on what we have done with the percentage increase in property tax and income for the ability to pay.  Draw a line and say if the taxpayer’s property tax percent goes up this much and the taxpayer’s income is in this bracket, then we are going to provide property tax relief -- whether it is the income tax system or property tax system.  That might be the best way.  All of these ideas introduce complications and those complications are going to have to be weighed against whether or not it is accomplishing what we want to accomplish.  The principles that he would like to get into this motion are predictability, but maybe more importantly the ability to pay.  We never want to be in a position of taxing Montanans out of their homes.

Representative Gary Branae said he agrees with Kurt Alme’s statement.

Kurt Alme amended the motion to say that property taxes for the outliers need to be made predictable and affordable for Montana resident homeowners.  The amendment passed unanimously. Chairman Bob Story asked for further discussion on the amended motion.

Harold Lockhart, citizen of Whitefish, asked for a definition of outlier.  Kurt Alme responded that his definition of an outlier is people who see their property tax values increasing significantly. 

Representative Carl Waitschies expressed concern with tying property taxes to income levels.  This could be labeled as social engineering rather than tax policy.  Representative Waitschies added that basically a resident should choose accommodations that he can afford. 

Dud Mahler, citizen of Whitefish, commented that in his research, he found the meaning of ‘ability to pay’ was:  the ability to pay is demonstrated by the act of buying a property.  It is indicated that you have the ability to pay if you can buy the property, so if you use the limit to increase the assessed value, then you don’t exceed the person’s ability to pay.  Presently, when the tax is increased, it is exceeding the owner’s ability to pay the tax.  So if a property owner had the ability to pay when buying the property, and we have limited the increases to some reasonable amount to cover the decreases that are going on in the property system, then that requirement has been satisfied.

Jim Stack, citizen of Whitefish, commented that one of the big differences of the ability to pay comes in the form of ownership and other states have tried to do that and it has always become a very big issue.  If you have an out of state owner, you have nothing other than their word on their ability to pay.  If you have recreational property that is passed on from parent to children and one lives out-of-state, do you combine their incomes or what?  How do you get that income from the out-of-state child? 

Chairman Bob Story asked if there was any further discussion on the motion or the amendment, which has to do with homeowners and the ability to pay or residents and the ability to pay?  If not, the Council should proceed to vote on the amended motion.

The amended motion read:

In addition to the previous motion, the Council is concerned with making property tax predictable and affordable for the minority of Montana resident homeowners who would still experience a significant increase in tax liability resulting from reappraisal; and there should be a strong look at acquisition value as a viable option to the current property tax system.

The motion as amended passed unanimously.

Chairman Bob Story asked the Council to review the minutes from meetings on November 21, 2002 and December 20, 2002.  There were no changes to the minutes.  The Council voted, and unanimously approved the minutes for both meetings.

Chairman Bob Story asked the Department of Revenue to get a legal opinion regarding if we stayed with the cyclical reappraisal but only phased-in a percentage of it over the period of the cycle and whether that would create a legal issue with equity.  We will have those jurisdictions where all the property will be phased-in in a couple years and some will have reappraisal values that just continue to disappear from the horizon.

Chairman Bob Story said he thought there were some good suggestions from the audience that we evaluate the property tax system.  The Council had a report on acquisition value that showed some of the problems of the acquisition value.  He hoped the audience didn’t interpret those to be the Department of Revenue decision on acquisition value.  Those were basically standard arguments gathered through a literature search.  He is sure Mr. Stack understands the process.  There are some things out there that need to be done regarding legal issues and how you deal with what we talked about before.  Is the growth rate a predictable growth rate under an acquisition system?  How does that growth rate compare to the growth rates of other classes, and are we going to either be shifting property taxes from other classes to homeowners or from homeowners to other classes?  The shift would happen even under an acquisition system, if the values are growing at 5% and everybody else is growing at 2%.  Unless we change our mill cap statute, you are basically starting to shift everyone else’s property tax to homeowners. 

Dud Mahler, citizen from Whitefish, said when you start talking about limiting rates, if you stayed with the ad valorum system, this is exactly the same as the current reappraisal every six years cycle, except that we limit the increase in assessed value each year.  This is no different than playing around with the homestead exemption now.  We are playing with the assessed valuation every six years.   It would be doing the same thing in limiting the increased value.  He suggested the only problem to address  is the reassessment of property at time of sale.  Property values do increase and decrease over a cycle; if you phase-in at 2% or a fixed rate, it tends to catch up.  He doesn’t see any problem with implementing acquisition value; it is fair, it is reasonable and it is predictable and it is doable now.  Other states have done it.

Chairman Bob Story asked if there were any other questions.

Representative John Brueggemann asked that the Department of Revenue take a look at another option with respect to landstead exemptions.  Chairman Bob Story asked Brad Simshaw if he would take out vacant land in his final report on a landstead.

Chairman Senator Bob Story adjourned the meeting at 12:25 pm.   Any further meetings of the Council are subject to the call of the Chairman.

Senator Bob Story, Chairman

Kurt Alme, Vice Chairman navigation footer
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