Residents of Silver Bow and Gallatin counties are urging a state district court judge to mandate the Montana Department of Revenue to recalculate residential property taxes. They allege the Gianforte administration has breached the law and the state Constitution by permitting significant tax increases for homeowners, while most business categories experienced reductions.
A lawsuit was filed in Butte-Silver Bow County District Court by attorneys for Thomas Powers, Cinder Lord-Powers, and Ryan and Elizabeth Swenson. They are requesting class-action status and an immediate halt to residential property tax collection until the rates are balanced.
Residential property taxes became a contentious issue post the 2023 Legislature session, with bills rising significantly. This increase followed an influx of people to Montana after the COVID-19 pandemic, driving property values up. Although Gov. Greg Gianforte introduced a rebate program for homeowners, which could return up to $675 per year, critics argue it was insufficient and cumbersome.
The Republican-led Legislature faced criticism for not addressing property tax adjustments despite warnings from the Montana Department of Revenue about potential “sticker shock” for homeowners. Gianforte criticized local and county governments for excessive spending, a point of contention even within his Republican party.
The lawsuit argues that the Gianforte administration and the Department of Revenue should have corrected the imbalance in property tax rates, ensuring fairness. It claims the administration neglected its duty to equalize tax valuations, shifting an unfair burden onto residential taxpayers.
Attorneys, led by John M. Morrison of Helena, argue that Montana’s market-rate data for homes is precise, unlike business valuations, which often lack comparables. This discrepancy allows businesses to negotiate lower taxes, leaving homeowners at a disadvantage. The lawsuit highlights that centrally assessed properties avoid taxes on “intangible value,” a practice that shifts the tax burden to residential taxpayers.
The lawsuit provides examples of taxation disparities, noting that while six of nine business classes saw tax decreases, the share of residential taxes in the state budget rose from 51% to 59%, generating nearly $900 million more from homeowners. Meanwhile, taxes from centrally-assessed businesses like NorthWestern Energy decreased significantly.
The legal action seeks class-action status and aims to use the “private attorney general doctrine,” which would require the state to cover attorney fees if the plaintiffs succeed in court. The lawsuit claims the state has overcharged residents by over $100 million. The Daily Montanan did not receive comments from the governor’s office or the Department of Revenue before publication.
The residents are represented by John M. Morrison of Morrison, Sherwood, Wilson and Deola of Helena, and Allan McGarvey and Dustin Leftridge of McGarvey Law of Kalispell.
