MontanaHB 48369th Legislature, Regular Session (2025)HouseWALLET

Revise laws to reduce property taxes while preserving the current 95 school equalization mills

Sponsored By: Courtenay Sprunger (Republican)

Signed by Governor

Education - K-12Taxation--PropertyRevenue, StateEducation - School FinanceState FinanceCounties

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Bill Overview

Analyzed Economic Effects

10 provisions identified: 3 benefits, 2 costs, 5 mixed.

FY2026 boost for buses and school aid

By May 15, 2025, the revenue department gives the superintendent an estimate of levy revenue above $441.624 million for FY2026. If the excess is more than $0 but under $24.5 million, the superintendent raises transportation mileage rates so total state busing payments increase by that amount, capped at 200%, and these higher rates stay in later years. If the excess is at least $24.5 million, the superintendent first raises mileage rates, then subtracts $24.5 million. The leftover then increases retirement aid by up to $7.7 million and BASE aid by up to $17.9 million. This steers extra levy revenue into school aid and transportation instead of higher uniform taxes.

More state money for school buses

Beginning July 1, 2025, the state pays about 75% of eligible school transportation reimbursement, up to half of a district’s transportation fund. Available revenue is split three‑fourths from the state and one‑fourth from the county. Counties get one‑third of the state payment as their apportionment, with proration when routes cross counties. Reimbursement uses per‑mile caps: $0.50 to $1.80 for buses (by size) and $0.50 for nonbus miles. The superintendent may adjust these rates. This shift can lower local levies for busing.

Reappraisal guardrails to hold taxes flat

Each year, the revenue department and OPI review how reappraisal affects school aid and property taxes. By May 1, OPI adjusts guaranteed tax base multipliers so reappraisal does not cause a statewide property tax increase. If HB 156 is also law, a replacement section takes effect July 1, 2026 to continue these annual adjustments. If both laws pass, sections 8 and 9 of this act end on June 30, 2026.

New county school mills on property

County commissioners levy two new, fixed school taxes. Elementary gets 33 mills ($33 per $1,000 of taxable value). High school gets 22 mills ($22 per $1,000). These apply to taxable property, with certain statutory exemptions. Money funds BASE school programs and the school equalization account. Any surplus is sent to the state each month, with a final payment by June 20 each year.

Facility and technology funding changes

The state changes how major maintenance aid is figured, using the latest taxable value and multiplying the statewide ratio by 187%. Districts may ask voters for technology levies (up to 10 years for levies approved after July 1, 2013). Trustees can levy taxes or issue bonds for joint school construction, and these levies are not under the usual 15‑10‑420 cap. These rules can boost facility and tech funding but may raise local taxes when voters or boards approve them.

Rules for BASE and GTBA aid

The law defines how to compute a district’s minimum BASE budget. It uses 80% of basic and per‑ANB entitlements, 100% of several targeted payments, and 140% of special education costs. Guaranteed tax base aid can cover up to 35.3% of basic and per‑ANB entitlements, and up to 40% of special education costs. It also sets how to compute GTBA dollars per mill for each district.

New levy growth and counting rules

Local governments may set mills to raise last year’s property taxes plus half of the average inflation over the last three years. Mills are based on current taxable value minus newly taxable property. Newly taxable property includes annexations, new or expanded buildings, some first sales into class 4, and moves from tax‑exempt to taxable status. Certain school levies are excluded from the standard 15‑10‑420 limit. Those excluded levies also do not count in next year’s base used to set mill limits.

Budget caps for school aid increases

If HB 2 is also law, Transportation Aid must rise to match new mileage rates but cannot exceed $36.5 million in FY2026 or FY2027. The K‑12 BASE Aid budget for FY2026 must also rise as needed, but the increase cannot be more than $25.6 million. These limits cap how much the state adds for these programs.

1.5-mill tax in five counties

Cascade, Lewis and Clark, Missoula, Silver Bow, and Yellowstone counties must levy 1.5 mills each year. That is $1.50 per $1,000 of taxable value. Money goes to vocational‑technical education budgets.

How big mines are taxed for schools

Large mineral projects stay subject to statewide and basic county school levies on their total taxable value. Any value increases after a permit are allocated under an existing rule and are treated differently from regular local levies.

Sponsors & Cosponsors

Sponsor

Courtenay Sprunger
Republican • House

Cosponsors

Greg Hertz
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 272 • No: 26

Senate vote • 4/22/2025

Do Concur

Yes: 46 • No: 4

Senate vote • 4/18/2025

Do Concur

Yes: 49 • No: 1

House vote • 4/5/2025

Do Pass

Yes: 87 • No: 11

House vote • 4/3/2025