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)

Became Law

Schools and EducationTaxation--PropertyRevenue, StateSchool FinanceState FinanceCounties

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 1 benefits, 3 costs, 4 mixed.

More state help for school busing

The state now pays 75% of set pupil‑transportation reimbursements or 50% of a district’s transportation budget, whichever is less. Maximum per‑mile payments are 50¢ and 95¢ for bus miles and 50¢ for nonbus miles, with pay only for days service ran. Counties must share transportation money using the same ratio as one‑third of state pay, with proration rules if needed. If House Bill 2 is also approved, state Transportation Aid can rise by up to $36.5 million each in FY2026 and FY2027, and K‑12 BASE Aid for FY2026 can rise by up to $25.6 million.

95 school mills stay; new levies

The law keeps school equalization at 95 total mills and sets three fixed levies starting July 1, 2025: 33 mills for county elementary, 22 mills for county high school, and 40 mills statewide. You pay $33, $22, and $40 for each $1,000 of taxable value, unless your property is excluded by statute. School district levies are not limited by the general local levy cap. The state rounds statewide mill calculations up to the nearest tenth, within legal limits.

Local property tax cap and carryforward

Local taxing units can raise property tax revenue each year up to last year’s taxes plus one‑half of the average inflation rate over the past three years. If they levy less than allowed, they can carry that unused mill authority forward and use it later. This ties taxes to inflation and can allow catch‑up increases in a future year.

School building and technology funding tools

The law creates a state account for major school maintenance and sets a formula using statewide values and a 187% multiplier. State aid may cover up to 80% of a district’s maintenance need and is prorated if funds are short. Trustees may set up a technology fund and ask voters for a technology levy lasting up to 10 years. Districts may partner on joint construction and can seek levies or bonds, subject to the usual mill rules.

Property reappraisal timing, protection, and notice

Most property is reappraised on a set schedule: class 3, 4, and 10 every two years (on December 31 of the second year); most others each year. Each year by May 1, the state adjusts school funding multipliers so reappraisal does not cause a statewide property tax increase. Your reappraisal notice now shows population‑adjusted inflation, Montana income growth, and 10‑year annualized property tax changes for your county. In even‑numbered years, the state also publishes that county data by the second Monday in October.

State formulas adjust school aid and mills

Each December, the superintendent forecasts revenue for the school equalization and tax‑reduction account using statewide taxable value times 95 mills or an alternative. If the forecast changes by $2 million or more from last year, the superintendent adjusts multipliers for guaranteed tax base, retirement guaranteed tax base aid, and major maintenance within set caps. The law sets schedules and caps for these multipliers and triggers increases when certain state transfers rise by at least $1 million. Districts below the statewide guaranteed tax base ratio qualify for aid up to set percentages, including up to 40% of some special education costs. Guaranteed tax base aid is calculated from a district’s prior‑year GTBA budget area and taxable value; extra funds are returned to the state. If House Bill 156 is also approved, some sections end June 30, 2026, and the required annual adjustments narrow on July 1, 2026.

New rules on mineral project tax base

When an approved impact plan for a large mineral project shows a revenue gap among local areas, the new taxable value after the permit can be assigned to local governments under that plan. It does not have to follow normal county and school levy patterns. The full value still pays statewide mills and the basic county BASE and school retirement levies. This starts July 1, 2025.

New 1.5 mill vo-tech county tax

Starting July 1, 2025, Cascade, Lewis and Clark, Missoula, Silver Bow, and Yellowstone Counties must add a 1.5‑mill tax for vocational‑technical education. You pay $1.50 for each $1,000 of taxable value.

Sponsors & Cosponsors

Sponsor

Courtenay Sprunger
Republican • House

Cosponsors

Greg Hertz
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 269 • No: 26

House vote • 4/22/2025

Do Concur

Yes: 46 • No: 4

House vote • 4/18/2025

Do Concur

Yes: 47 • No: 1

House vote • 4/5/2025

Do Pass

Yes: 87 • No: 11

House vote • 4/3/2025