Montana Association of Counties wants ‘swift resolution’ on property tax question

The Montana Supreme Court should sort out the property tax questions that have come up this year so people pay the right amount in 2024, according to a lawsuit filed this week.

At least three lawsuits already are asking the courts to clarify a statute that governs how much money counties must collect on behalf of the state for education equalization.

However, the Montana Association of Counties, plaintiffs in the most recent case, said those other cases fall short of a key question.

This year, taxable property values shot up in Montana, and most counties — 49 of 56 so far — levied fewer mills to compensate for otherwise skyrocketing property tax bills. A mill is a taxing value, equal to $1 for every $1,000 of a property’s assessed value.

The counties said state statute allows them to lower their taxing rate, but the Department of Revenue directed them to levy the maximum anyway — and in doing so, has “impermissibly attempted to increase statewide property taxes by nearly $80 million,” the lawsuit said.

The association said the state wants to “bank” the extra, and the court needs to decide if that’s allowed.

In a separate lawsuit filed by the Montana Quality Education Coalition, the plaintiffs allege that if the counties don’t levy the full amount, children in public schools will be shorted. The dollars in question equalize public education funding in Montana school districts.

Republican Gov. Greg Gianforte also argues the decision will hurt schools. His administration sued Missoula County over the matter, and he has the state’s constitutional mandate to provide a quality education is at stake.

In this week’s filing, the association asks the Montana Supreme Court to rule quickly, by March 15.

Tax bills will be due again on May 31, 2024, and MACo said it wants an answer from the court so counties levy — and taxpayers pay — the right amount.

“If petitioners are successful, but revised property tax bills are not issued in advance of that deadline, taxpayers in counties which levied 95 mills (the maximum) may lose their right to a refund of the illegally-levied 17.1 mills,” the lawsuit said.

In a news release, Montana Association of Counties President and Fergus County Commissioner Ross Butcher said the organization wants a swift resolution to the question.

“Filing directly on behalf of our membership will expedite the process and ensure that tax collections and distributions are made according to the law,” he said in a statement. “We are also committed to collaborating with the State, Legislature and the education community to prioritize adequate and equitable school funding in the next legislative session.”