An email sent to key business lobbyists this weekend by the sponsor of Republican Gov. Greg Gianforte’s property tax relief bill suggests the bill might be in political trouble as it competes with another proposal in the Montana Legislature. Rep. Llew Jones, R-Conrad, expressed optimism about the bill’s prospects. However, other lawmakers said the bill faces opposition as it progresses in the Montana Senate and they currently favor other proposals.
Gov. Gianforte’s property tax relief plan, House Bill 231, seeks to lower homeowner and landlord property taxes while increasing taxes on second homes and short-term rentals like Airbnbs. The goal is to prevent residential relief from raising business taxes. Developed by Jones with the governor’s property tax task force, the bill is Gianforte’s strategy to counteract rising property taxes in Montana, where property taxes increased by 21% from 2022 to 2023, and are projected to rise another 11% this year.
In a message sent at 4:44 a.m. Saturday to lobbyists from refineries, utility companies, and agricultural groups, Jones warned that House Bill 528 is becoming the favored tax relief option. Sponsored by Rep. Ed Byrne, R-Bigfork, HB 528 cuts tax rates for residential, commercial, and agricultural properties to counteract rapid property value growth.
Jones occupies a crucial role in tax discussions as the House Appropriations Committee Chair. He informed lobbyists that HB 528 might advance this week, stating, “I am comfortable moving forward in this direction if that’s the general agreement, although I believe [HB] 231 was more beneficial for almost all groups.” Supporters of HB 528 argue it effectively addresses Montana’s property value surge. Jones contends his proposal is superior, saying a simple tax rebalance may increase taxes on industrial and small business properties in rural areas.
The Montana Department of Revenue analyzed the Byrne tax bill, estimating a 24% tax increase for non-residential, commercial, or agricultural properties, compared to an 8% increase under the Gianforte-Jones bill. The analysis suggests, for instance, that HB 528 would raise taxes for Phillips 66 refinery by $3.8 million annually.
Jones’ message was meant to spur lobbyists to resist HB 528 more actively. The bill passed the initial House floor vote 90-9, with minimal debate, while the Gianforte-Jones bill passed 68-30. Bob Story, Montana Taxpayers Association President, testified against HB 528, labeling it “just about the most disruptive bill to the current property tax system that we’ve ever seen.”
Gov. Gianforte and Jones, leading the moderate Republican “Solutions Caucus,” advocate for HB 231. Meanwhile, Democrats propose their own alternatives, and Senate Republican leaders back Senate Bill 90, which would use lodging tax dollars for tax rebates. Senate Taxation Committee Chair Greg Hertz opposes both Jones and Byrne’s bills in their current forms.
Lawmakers agree on the need for significant property tax relief this year, but factions are struggling to find a compromise. Byrne, sponsoring HB 528, fears that legislative inaction could empower a tax reform group aiming to cap property taxes through a constitutional initiative in 2026.
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