Loading...
HomeMy WebLinkAboutMontana Taxpayer - 10/01MONTANA TAXPAYER MONTANA TA"AYMS HELENA, Volume 35 Number 8 Ortnher 2M01 80's Annual Meeting - December 6 The Montana Taxpayers Association celebrates its 80m anniversary this year at our annual meeting December 6t° in Helena at Best Western Colonial Hotel. We've invited Governor Judy Martz as well as other speakers who will provide you up to date information on Montana's financial, economic and revenue situation. Once again, we'll be offering CLEs and CPEs. Registration packets will be coming in the next couple of weeks. Medical Insurance Premium - Mill levy increases HB409 passed during the 2001 Session allowed local governments to increase their mill levies outside the mill levy cap established in 15-10-420 for increases in medical insurance premiums. The Montana Taxpayers Association was the sole opponent to this legislation. As a result of our testimony, a subcommittee met to discuss amendments to the bill. Although we sympathize with the struggle of local governments to.meet rising medical premiums, we were concerned this legislation was not in the best interest of the taxpayers. We recently conducted a survey of local governments to gage the effect of this legislation on mill levies statewide. The results are in - you be the judge. On the county level - 18 counties who returned the survey increased mill levies anywhere from 0.77 mills in Daniels County to 11.26 mills in Madison County. The actual increase in tax dollars ranged from $3,659 in Daniels County to a whopping $737,982 in Lewis and Clark County. Of the 69 cities responding, only 15 increased their mills under HB409. Many of the smaller cities do not carry health insurance for their employees. Some of the responding cities were not aware of the legislation and intend to take advantage of it next year. The mill levy increases in the cities ranged from 1.84 to an incredible 21.43 mills in Laurel (a 22% increase in their total mills)! Some of the counties taking advantage of this new provision in statute: Mill Levy Tax $ County. Increase Increase Broadwater 3.04 $ 30,137 Cascade 3.70 $386,543 Granite 3.00 $ 24,351 Lewis & Clark 9.00 $737,982 Madison 11.26 $300,759 Musselshell 5.30 $ 35,865 Pondera 5.22 $ 61,290 Powell 3.89 $ 43,669 Ravalli 9.752 $500,682 Roosevelt 1.00 $ 25,463 Rosebud 0.36 $ 30,617 Sanders 1.71 $ 45,910 Stillwater 3.49 $110,536 Valley 5.21 $136,691 Some of the cities taking advantage of this new provision in statute: Mill Levy Tax $ City Increase Increase Chinook 6.16 $ 6,148 Circle 9.70 $ 5,400 Cut Bank 2.71 $ 6,548 Deer Lodge 1.93 $ 4,502 Fort Benton 14.15 $ 19,594 Laurel 21.43 $130,014 Lewistown 7.25 $ 36,974 Livingston 1.79 $ 15,177 Miles City 6.58 $ 42,201 Nashua 33.00 $ 6,628 Poplar 9.55 $ 4,451 Ronan 3.66 $ 5,764 Stanford 1.84 $ 20,727 Three Forks 2.45 $ 4,125 Another piece of legislation, HB345 created local compensation boards to review salary levels of elected officials. Historically, county salaries have been capped at a maximum, based on county classification. Classifications were based on the total taxable value of the county. Some of the counties were at the cap, while others were not. The legislation provided local governments more flexibility in setting salaries. -1- Montana Taxpayer Address all communications to: MONTANA TAXPAYERS ASSOCIATION P.O. BOX 4909, HELENA, MT 59604 Telephone(406)442-2130 FAX (406) 442-1230 Web Site - www.montax.org E-mail - mwhittOmontax.org - 12hyatt®montax.org - Business Office: 506 North Lamborn vddvvdvdddvvvdeddvdvedd OFFICERS AND STAFF CHASE T. HIBBARD, Helena.... Chairman, Board of Directors BILL SPILKER, Helena, Vice Chairman, Board of Directors MARY WHITTINGHILL, Helena.... President- - PAM HYATT, Helena.... Office Manager vvdddvdvvvdddvvvvvvvdvd DIRECTORS Contractors -John Director at Large- Tom Rolfe, Helena Farm Machinery -Gordon Nelsen, Conrad Financial - Craig Anderson, Billings Gas & Electric - Emle Kindt, Butte Hardware Slores - Mining - Russ Ritter. Helena- - - Motor Carriers - Ken Cdppen, Missoula Railmeds - Alec Vincent Texas - Real Estate - Bill Spilker, Helena -- Retail - Marilyn Hudson, Helena Sheep & Wool-Chase Hibbard, Helena Teleo°mmunications - Rick Hays, Helena Timber Pmtlucts- Doug Mood, Seeley Lake Class l-A Low lligh Percent Raise 3.4% 20.58% FY2001 Base Salary $39,062 $56;118 Class 1-B Percent Raise 3.4% 10:158% FY2001 Base Salary ' $28,502 $33,426 Class 2 Percent or Dollar Raise 3.4% ` - $5,000 FY2001 Base Salary $24,965 $37,216 Class 3 Percent or Dollar Raise 2.67% $3,000 FY2001 Base Salary $26,600 $35,387 Class 4 Percent Raise----... -9%, FY2001 Base Salary $27,000 $29,031 Class 5 Percent Raise 3.4% 13% FY2001 Base Salary $24,081- $29,020 Class6 =='-_ ---- - - - Percent Raise 3'40%; =- 1SAIA FY2001 Base Salary $21,081 $26,940 Class 7 Percent Raise 3.4% - -1.0%- FY2001 BaseSalary $21,369- $22,810 A county by county list of the increases can be found on the Montana Associationof Counties website at www.maco.coi .us. Agricultural Land Valuations Two interim studies are underway which will examine the taxation of agricultural land. One; HB609, deals specifically with the specific formula for determining the value of agricultural` land. The other, SJR21; is much broader and is- intended to examine specific issues surrounding agricultural land valuation and non- qualifying agricultural land. HB609 - Revise criteria for establishing productive values for agricultural land The valuation of agricultural land for property tax purposes has gone through many changes over the last forty years. In the early 1960s standardized land valuation standards that were developed were based on a capitalization of net operating income. In 1985, the Legislature rejected proposed agricultural land valuation schedules and froze the values until the next reappraisal, pending the formation and recommendations from an agricultural advisory committee. In 1990, a committee recommended a specific methodology, formula, and data sources in the calculation of the new agricultural land valuation schedules. While the appraised value of agricultural land increased significantly, the statewide impact of the new schedules was taxable value neutral. There were shifts in value, however, within the various classes of agricultural land, (i.e. grazing, non-irrigated farm land, continuously cropped hay land, non-irrigated continuously cropped farm land and tillable irrigated land). The tax rate was reduced from 30 percent to 3.86 percent - the same rate used for residential. Further refinements have been made to the valuation formula by subsequent committees in 1993, 1996 and 1999. HB009, passed by the 2001. Legislature, requires an agricultural advisory committee to review the formula, specifically the capitalization rate and the parameters used to determine the per acre value. This committeewill meet on December 3'a and 4`s in Helena to discuss farmland; hay land and range land valuations. On February 6°' and 7" they will address irrigated land and on June 60' and 7`s they will finalize the proposed schedules. Senate Joint Resolution No. 21- Study of the taxation of agricultural and non-Qualifying agricultural land The 1993 legislature passed legislation that created a new category of land classification that,is referred to as non-qualified ag land. The legislation was intended to maintain green belts around urban areas by valuing property, _between -20_to_..160--acres-at.-a value more- consistent with ag land and less than the market value associated with subdivided property. In subsequent sessions, there has been a lot of discussion -2- surrounding,.this ,category.-of.--land. Some of the discussion- centers around the fact that certain agricultural land carries a higher taxable value per acre than the non-qualifred.land. Currently, the market value per acre for, non-qualified agricultural land is $37.95 (grade 3 grazing land). The taxable value is determined by multiplying ,7 times the tax rateof agricultural land or a taxable value of--approximately $9-per-acre- and an average tax of about $3 to $3.50 per acre. Land classified as tillable irrigated has an average statewide taxable value per acre of $10.31 and average tax of $4 per acre. The other debate is those properties that don't qualify for non-qualified agricultural land pay their taxes based on the market value of the property. SJR21 was passed to address some of the issues surrounding the valuation of non-qualified agricultural land. The Revenue and Transportation Interim Committee will be discussing SJR21 at their December 4`s meeting in Helena. They are interested in hearing from individuals and organizations on what should come out of the study, what should be looked at, what needs to be done, and what should be left alone. MAR 44-2-113 SECRETARY OF STATE, BUSINESS SERVICES BUREAU FEE CHANGE PROPOSALS - October, 2001 The Secretary of State's Office is proposing the following changes as part of their continuing efforts to streamline filing (and refilling) requirements for businesses in Montana. Our association is supportive of these proposals as they promote efficiency and responsiveness of government. ISSUE - 17,000 annual reports, or 36% of the total number of annual reports received each year are rejected because customers either did not include the complete and correct information or they did not include the additional $5 required to make a statement of change. Rejected documents are sent back to the customer to obtain more information, to secure a Statement of Change, or to obtain the additional $5.00. SOLUTION - Eliminate the additional $5 for filing the statement of change. Incorporate the statement of change into the annual report, and increase the annual report filing fee from $10 to $15. The result is a reduction in processing time, elimination of additional mailing costs, and elimination of confusion and frustration for customers. ISSUE - A number of procedures performed for customers- throughout the year, aside from the annual report filings, have traditionally cost $5.00. Those procedures include the transfer or cancellation of reserved names and the statement of change for names and addresses of registered agents. Again, documents are rejected because the customers have not enclosed the required $5 fee to make changes. SOLUTION - Eliminate the $5.00 fee for the transfer or cancellation of reserved name. Eliminate delay, expense, and customer frustration. ISSUE - Customers regularly call our office and ask for copies of the documents in their file. Because the customer services representatives do not have immediate access to the files, and because they cannot leave their telephone responsibilities, they have to wait until they can leave their desk, find the file from among 50,000 files, and count the pages in the file. They can then call the customer and tell them what the cost of the copies will be, ($.50 per page x number of pages), and explain that they will provide the copies once SOS has received the correct amount from the customer. SOLUTION - Charge a flat $10 fee for providing copies of file documents. Inform customers of the charge over the phone when they call and return documents once payment is received. The average cost of copies is $7.00 at $.50 per page. Additional costs include staff time and mailing. Customer receives documents in a timely manner. More efficient use of staff time. ISSUE -The charge for filing delinquent annual reports is $20 for documents filed after April 15, but before September 1, and $30 for documents filed after September 1. The number of delinquent documents poses a significant workload issue for staff. SOLUTION - Establish the delinquent filing fee as $30 for all documents filed after April 15. The expected result is that more customers will file on time. An additional result is SOS will experience a slight increase in revenue that will be used to improve technology. More on Montana Taxpayers Association Brochure - Montana's tax burden lower than average, but not for wealthy (Reprinted, in part from the Great Falls Tribune, October 21, 2001 by Mike Dennison) If you're an average Montana family, meaning you don't earn much more than $25,000 a year, think again. But if you're a wealthy family, you might have an argument. And if you're looking at the state as a whole, the answer is probably "No" -- compared to other states. This information -- and much more -- is in a new pamphlet published by the Montana Taxpayers Association. The purpose, according to association president Mary Whittinghill, is to show where. Montana stands as people start talking about tax reform. And people who influence public policy in Montana are talking about tax reform. The Martz administration has a plan, and a "Citizens-Jury" meets this week (beginning Monday) to talk about the state tax system. "We wanted to develop a brochure, so when people are having tax discussions around the state, perhaps we could all start on the same page," Whittinghill said. This "same page," as compiled by the association with the help of Montana State University economics professor Doug Young, has some intriguing results: -3- Montana has the lowest state/local per capita tax burden in the Northwest and Northern Rockies regions. At $2,342 per person, the per capita tax burden for Montana is 48th in the nation. Because Montanans' income is also among the lowest in the country, the state/local tax burden is relatively higher when measured as a percentage of personal income. But it's still below the national average (31st) and in the middle of the pack with its neighboring states. Residential property taxes in Montana rank in the middle of the pack both nationally (28th) and in the region. For families earning $25,000 a year, state and local taxes (income, property, sales and vehicle) are well below the national average (38th among the states). The ranking is probably lower now, because the Taxpayers Association study did not include the vehicle-tax reduction enacted by a voter referendum in 2000. For families earning $150,000 a year, Montana's state and local taxes are above average (22nd nationally) and the second-highest in the region. It's this last item that seems to draw the most attention of tax reformers, who say Montana's high marginal rate of income tax may discourage economic development. In fact, Montana's top bracket of 11 percent is the highest marginal state income-tax rate in the nation. "It continues to be the case that we have one of the most steeply progressive (state) tax structures," said Young. The conventional wisdom among business types is that this high rate scares away people who might want to expand a business or move here to start a business. "At the higher incomes, which can generate tremendous income for your state, our ranking slips, and we're not competitive with the other states," Whittinghill said. 138nv i 30 l?l Io ?coz z 5 AON O n The Montana Chamber of Commerce also helped support the association's pamphlet. Whittinghill and Chamber President Webb Brown said the pamphlet is not an attempt to promote any type of tax reform over another. "There is so much talk out there: 'We rank high, we rank low,"' Brown said. "This was an attempt to get everyone on the same page. This maybe isn't the definitive piece, but it is at least as close as we're going to get to what the actual tax rates are." It's worth noting, however, that those involved with the pamphlet often have been supporters or promoters of a general sales tax in Montana. Young said he believes the state could help boost its economy by "some flattening" of income tax rates, reducing property taxes, and adopting a general sales tax. "I think it would improve our business climate," he said. "It would make it more attractive for people to establish and attract business." Tables in the pamphlet were compiled from various sources. Young said he and Whittinghill searched the country for the most accurate and up-to-date studies they could find. They wanted studies on all taxes and each major type of tax paid by Montana citizens. For example, the property tax comparisons are from a 2000 study by the Minnesota Taxpayers Association. Young said they wanted to look beyond U.S. Census data, which not only are several years old, but also which have been wrong in the past. Several state agencies submit data to the Census Bureau, which has double-counted some taxes or omitted others, he said. "We relied on Doug's expertise in reviewing these national studies," Whittinghill said. "He made the determination on which ones used the information the most accurate way." O wO-VVO691Y4 l?lel 0 L X09 Od Jafil" lame- jo f4lO 069110100 *..*..+...+.. IZ'oN uui[ad. _ Iv °a'°" P096S J_K `sualaH IIFd 606 xo9 .O.d - u'09tuu 1 91JoM 909 oc,,•» i::.,id NOIIVIDOSSV SH9AVdXV1 VNVINOW