The western state tax rebellion that could reshape US politics
From Politico, May 2, 2024:
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Across the Mountain West, an influx of coastal out-of-staters are causing property taxes to skyrocket, sparking a backlash that could scramble politics across the region.
In some Montana counties, property tax bills jumped by 46 percent in 2023. In Colorado, increases are as high as 40 percent. And in Wyoming, homeowners have been facing double digit percent increases for years.
Due in large part to the uptick in remote jobs in the aftermath of Covid, wealthier newcomers are buying homes under the open skies of the Rocky Mountains, leading to rising real estate values and hefty property tax assessments.
In Montana — where the part-time legislature won’t meet again until 2025 — upstart Democratic gubernatorial candidate Ryan Busse is putting calls to cut the property tax rate at the center of his campaign, while far-right Republicans push for reform from the other side of the political spectrum.
“I travel around the state and Republicans all across the state, Democrats, all of them, tell me the same thing,” Busse said. “Property taxes don’t discriminate. They go into every kind of mailbox, red mailboxes and blue mailboxes, and people cannot believe that this governor raised taxes like this.”
While Republican Montana Gov. Greg Gianforte didn’t raise the tax rate, per se, Busse says that the governor’s refusal to lower it after he knew tax bills for homeowners would go up amounted to accepting an increase.
And while Gianforte has heralded some tax relief programs passed by the legislature, his critics say he hasn’t dealt with the underlying problem. He launched a property tax task force in January, but political leaders in the state resisted calls from the state’s far-right Freedom Caucus to open a special legislative session this year to pass long-term reforms to the way the state does property taxes. After the proposed special property tax session failed, the Freedom Caucus asked voters to “remember these votes” during 2024 primary elections.
“You would think a Republican like Gianforte and the legislature would jump at the opportunity to cut taxes like this, but they haven’t,” said Montana State University Billings political science professor Paul James Pope.
“This has been a curveball for a lot of people, Montanans fully expected some kind of assistance,” added Pope.
In neighboring Wyoming, where GOP Gov. Mark Gordon in March signed a slew of bills to provide targeted property tax exemptions for longtime homeowners and refunds for lower-income residents, far-right legislators were still upset that Gordon had vetoed the strongest proposal that had passed the legislature with overwhelming support: A blanket homestead tax exemption that would have applied a 25 percent exemption to the first $2 million in value of Wyoming homes.
“This is the top issue in the state,” said Wyoming state Rep. John Bear, a Republican member of the state’s Freedom Caucus who called for the governor to sign the blanket exemption. “The pressure is not going to end.”
The sudden spike in property taxes — and the calls for relief — could lead to significant policy changes in these states in the next few years.
“This is going to be a time when people do respond, because the increases have been so sudden and so big,” said Michael Fields, president of Advance Colorado, a conservative political group that’s organizing a series of ballot initiatives to get homeowners property tax relief.
“It wouldn’t surprise me if in the next couple years a lot of reform happens like in the late 1970s and 1980s,” he added.
Fields and other property tax reform activists who spoke with Nightly said that the sudden increases across the Mountain West reminded them of the property tax revolts of the 1970s and 80s, when states like California passed Proposition 13, which has since severely curtailed property tax revenue collection, contributed to the state’s housing crisis and made income tax the central revenue generator.
But Adam Langley, an associate director of tax policy at the Lincoln Institute of Land Policy, a nonpartisan think tank based in Cambridge, Mass., said that moving too quickly to constrain assessed value increases, such as laid out in Proposition 13, could have “major, unintended consequences” on basic government functioning decades into the future.
“During these time periods where property taxes are rising rapidly, state and local policymakers need to respond, but need to do so in a way that they don’t put in place policy that is really hard to unwind in future years,” added Langley.
According to Langley, the growth in home values in Colorado, Montana, Wyoming, Idaho and Utah from 2020 to 2023 ranked “amongst the largest increases in U.S. history” as out-of-staters moved into the region. But he said local governments could control property tax burdens by reducing tax rates, as long as they weren’t burdened by state law.
In Colorado, Fields said that one ballot measure his group is pushing — that would limit statewide property tax increases at 4 percent a year — earned signatures faster than any other ballot initiative the group had sponsored, and drew support from Democrats and Republicans.
Colorado Democratic Gov. Jared Polis has tried to push for reform, but a ballot measure he was in support of failed last November after it was deemed too complicated and voters took issue with how it aimed at the state’s Taxpayer Bill of Rights. The Colorado legislature is now in the midst of trying to pass tax reforms to deal with the problem.
In Idaho, however, legislators moved more quickly to provide relief, passing packages in 2023 and 2024.
“There was an outcry from our constituents who were really clamoring for relief on the property tax question,” said Idaho state Rep. Jason Monks, the Republican majority leader. “If we’re not doing a good job, they’re going to put someone else in there, so we had to move quickly.”
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Originally Posted by Occam's Banana
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