Legislative Notes
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Property taxes in Montana are an incredibly complex issue, but that isn’t stopping Senate Republicans from working hard to reform them this legislative session. On January 22, the Senate Tax Committee heard SB 117, a bill I’m sponsoring that reforms how local governments in Montana calculate their budgets. The legislation provides a long-term solution to level out budget growth and ease the property tax burden on Montana residents and businesses.
The formula that local governments use to determine their budgets is based on taxable properties and the national inflation rate. Currently, budgets are adding half the rate of inflation and incorporate all of the newly taxable value of properties. My bill lets local governments increase their budgets at 100% of the inflation rate but caps the total budget growth at 4%.
Moreover, the legislation halves the amount of newly taxable value that gets added to budgets for certain property classifications. Some properties, like energy storage facilities, do not substantially increase costs to local governments, but their full taxable values are still added into budgets. This bill takes the other half of the value and puts it towards broad property tax relief.
People want an instant solution to the long-term problem of inflating local government budgets and property taxes; however, this is a long-term solution to the long-term problem. We need to stop the compounding growth of local government budgets. These adjustments use new growth to restrain local budgets and lower everyone’s property tax bills.
By fixing the budget side of the problem, this bill helps to level out runaway property tax increases. This is not an easy task, but it’s necessary to achieve ongoing property tax relief.
Legislators are considering a variety of other property tax reform bills this session, including SB 90 from Senator Carl Glimm, R-Kila, which was also recently heard in committee. Senate Republicans are focused on providing property tax relief to Montanans, and SB 117 is an important reform to achieve precisely that.
Senator Daniel Zolnikov, R-Billings, is a Senate Majority Whip in the 2025 Legislature.
