City of Billings officials worry that a popular bill that promises property tax cuts for Montana, called the Homestead Rate Cut Bill, could have detrimental impacts on Billings.

HB 231 would reduce property tax rates for many residents but it does so in a manner that would reduce revenue for the City of Billings, which functions under a Charter that limits how many mills it can levy. The levy cap means that the city would not be able to increase its levy, as most other cities can do, to maintain the same level of revenue. The city is at risk of losing up to $7 million in revenue.

In a recent town hall meeting, Senator Sue Vinton, unveiled the conflict, saying that only one other city in the state faces the same dilemma. Should HB 231 pass, the City of Billings may have to consider changing their City Charter. It has a pretty good chance of passing since it has support of Republicans, Democrats and the Governor. 

The conflict of the bill with City Charters was not initially realized and reports are there are amendments being proposed to deal with the conflict.

Vinton’s husband, Mike Vinton, who is serving his first term as a Representative for House District 40, noted that the bill – as with most of the tax cut proposals – does not really cut taxes but shifts them to other entities. HB 231 would lower taxes on homeowners and renters by imposing higher taxes on short-term rentals, second homes, businesses, coal mines and refineries. It’s really not a tax cut for everyone. It is why, Vinton said, he did not vote for it.

Rep. Vinton also noted that there are some issues to be concerned about in regard to what the legislation says constitutes a “second home.” An adjoining lot with a shop on it will be designated as a second home and “hit hard.” While people may think that a “second home” will hit people with secondary recreational properties and out-of-state people, “it is going to hit Montana residents,” he said – another reason he voted against it. “I don’t think it is what citizens want in the way of reducing taxes.”