SCOTT SIMON, HOST:
As property values rise, so do property taxes. In Montana, lawmakers are trying to find ways to ease taxes on owners. But as Montana Public Radio's Shaylee Ragar reports, policymakers are picking winners and losers.
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SHAYLEE RAGAR, BYLINE: A two-lane highway winds through a narrow canyon south of Bozeman and leads to Yellowstone National Park. Nestled between the two is the mountain community of Big Sky. Kirk Dige, a longtime real estate agent in the area, first moved here 38 years ago.
KIRK DIGE: It was a quaint little town. And probably the most common question from buyers, or potential buyers, would be, gosh, is Big Sky going to make it, you know? Is this place going to survive?
RAGAR: It's more than doubled in size since 2000. Here, there are two luxury ski resorts. Fly-fishing, rafting and hiking pull outdoor enthusiasts in the summer. Bill Gates, Mark Zuckerberg and Tom Brady have homes near here. According to the Bozeman Real Estate Group, the median price of a single-family home sold in Big Sky in February was $4.6 million. Here's Dige again.
DIGE: I can understand that there are some people that have this kind of money. But what's amazing is how many people seem to have that much money.
RAGAR: Those buyers - many of them from out of state - are driving up costs for everyone else. Republican representative Llew Jones says they should be taking on a higher share of property taxes.
LLEW JONES: We know that we have 12.5 tourists for every one in Montana now. We know that 23% of our taxable value is mailed out of state - to out of state addresses. Are we addressing this, or are we simply Band-Aid-ing it?
RAGAR: Nationwide, property values have climbed 27% faster than inflation since 2020, according to the Tax Foundation, a business-friendly tax policy group. Representative Jones worked with Governor Greg Gianforte to come up with a proposal. It would offer a tax break to primary residents and small businesses, while raising taxes on second homeowners, short-term rentals and big businesses. It has Governor Gianforte's full support.
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GREG GIANFORTE: One of my top priorities is delivering meaningful, permanent property tax relief to Montanans here in 2025.
RAGAR: Jones says that without a statewide sales tax in Montana, nonresidents with second homes here aren't paying their fair share.
JONES: I'm not punishing them. I'm happy they're here. They just don't pay income tax. You do. They don't.
RAGAR: There's a consensus property taxes must be addressed sooner rather than later, but there's disagreement over how. Democratic Representative Jonathan Karlen says the people who need the most help are getting left out - some owners and renters.
JONATHAN KARLEN: When I talk to constituents and I'm knocking doors, the biggest frustration is that they feel like their property tax bill is completely disconnected from their ability to pay.
RAGAR: Karlen is sponsoring a different bill - a tax credit back on homeowners' and renters' income tax bills proportionate to their cost of housing. Karlen's been shopping the policy around, using a simple model on a spreadsheet. He asked for examples of average constituents.
KARLEN: Let's say a household income of $75,000, and why don't we say a property tax bill of 4,500.
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KARLEN: And so what that would do is it caps their tax burden at an affordable portion of their income. And if their tax bill is more than that, it gives them an income tax credit for the difference.
RAGAR: In this scenario, the tax credit would amount to about $1,100. Dige, the Big Sky realtor, says there are plenty of people in need of assistance.
DIGE: I know people that have lived here a long time, and they're maybe reaching retirement age, and all of a sudden, their taxes have doubled. And it's like, gosh, we can't even afford it, but we have no place to go.
RAGAR: And, Dige says, many don't want to leave.
For NPR News, I'm Shaylee Ragar in Big Sky, Montana. Transcript provided by NPR, Copyright NPR.
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