In the last Montana legislative session, at least three bills aiming to give Montana governments options to pass localized sales taxes were introduced. These bills would not specifically create or raise taxes, but would have given Montana communities the power to institute a “local-option sales tax,” a customizable sales tax on products and services within their district.
House Bill 740 would have allowed cities, counties and tax districts the option of adopting a sales tax of up to 4%, provided that a large portion of revenue go to property tax relief. House Bill 435 offered a similar option for communities near national parks and public lands, while House Bill 195 would have funded infrastructure. All three were tabled, and I have no idea why.
Montana keeps rejecting a tax system that: brings in money based on how much people actually spend; hits revenue from out-of-state tourists and business; and could be fine-tuned and controlled by local governments to suit community needs. Instead, we have seen massive hikes in property taxes in recent years. Many of these taxes are self-imposed and do fund important projects around the community, such as the new library, school renovations, and land conservation efforts. However, funding these efforts solely through property taxes means that owners of high-valued properties pay significantly more taxes than people in other living situations. This system seems fair, until properties increase in value disproportionately to their owner’s income.
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I recently spoke to a fourth-generation Whitefish resident who told me that she finally decided to sell her family home. Her grandfather had built it decades ago, and the family kept it up ever since. Recently though, Whitefish has been rapidly growing, expanding tourist attractions and attracting wealthier residents from both in-state and out. This causes a rise in value for the land and houses around town, which raises her property value as well. She doesn’t have family money, her kids have moved out and she just can’t keep up with the rising taxes on the house. She finally decided to sell the home and move out of town. Families around the state face similar problems that must be addressed. A sales tax option would allow for greater revenue from tourist towns, and could more fairly distribute where that money comes from.
The Montana Legislature ought to allow local governments to set a sales tax, and use a portion of generated funds to relieve housing costs. It would let local governments take advantage of what is at this point Montana’s largest industry: tourism. Currently, tourists pay very little to enjoy Montana’s wilderness and outdoors so the burden falls largely on Montana residents. Why not allow a tax that hits out-of-state visitors? We could portion parts of the revenue to take better care of natural areas, fund parks and better invest in infrastructure. We should dedicate part of it to taking care of government lands, and protecting our natural heritage as well. We could allow communities to define redistributive taxes that support Montana businesses, families in the service industry and sustain our natural areas so we keep drawing in tourists.
Or we could continue forcing Montanans out of their homes and selling our open spaces to development agencies for suburbs and commercial stores, raising property taxes for infrastructure, development, and spending on support for individuals who can’t quite afford a residence. It’s a destructive cycle that must end. Allowing local-option taxes will be a step in the right direction. They can help farmers, ranchers, homeowners, renters and people who actually live here in Montana.