Four Major Concerns That Montanans Should Know Before Considering CI-134 Ballot Initiative

Wealthy landowners filed a constitutional ballot measure, CI-134, and claim that it will fix property taxes. But this initiative would upend Montana’s property tax system, decimate local services, and do very little for the average Montana homeowner. Out-of-state millionaires appear to be bankrolling the initiative with paid signature gatherers across the state. Montana voters should be wary of this initiative and decline to sign the petition. Here’s why.

1. CI-134 is a complicated initiative attempting to do three different things.

CI-134 includes three separate and distinct components:

• First, CI-134 caps local government property tax growth per parcel to not exceed 2 percent annually. Parcels would include all types of real property, including residential and commercial, but it also includes some industrial property, data centers, and large centrally-assessed property.

• Second, CI-134 immediately resets property tax levels for residential property at the lesser amount paid in 2024, 2025, or 2026, at the individual parcel level. This immediately cuts local government budgets by nearly $200 million across the state, with no way for local governments to make it up.

• Third, CI-134 would rewrite the current rules of local governments (and possibly school districts) to pass voted levies to require a majority “of the qualified electors,” rather than a majority of those voting.

2. CI-134 would immediately wipe out nearly $200 million in local government services.

CI-134 proposes resetting residential property tax levels to the lesser of 2024, 2025, or 2026, and the reset applies to each individual parcel. In data obtained by MBPC from the Montana Department of Revenue, this portion of CI-134 would immediately reduce local government property tax by nearly $200 million across the state, an average 15 percent cut in local government property tax revenue. In some areas of the state, local governments would see an upwards of 30 percent immediate cut in property tax revenue, forcing local governments to cut their budgets for fire, police, parks, and other essential services.

For example, CI-134 would eliminate nearly $30 million in property tax revenue for taxing jurisdictions in Gallatin County, including the county government, the municipalities, and fire districts. The amount is similar for local governments in Missoula County, with nearly $30 million wiped out, with no way to make this up. That includes a 26 percent cut to Seeley Swan Hospital District, 26 percent cut to the Swan Lake Fire District, and 21 percent cut to East Missoula Fire District.

3. CI-134 is designed to benefit wealthy out-of-staters while decimating local services for everyday Montanans.

By resetting to the lower of the past three years, the properties that stand to benefit are non-owner-occupied properties, especially those valued over $2.2 million. In 2025, 80 percent of residential property owners saw lower property taxes than in 2024, and a large percentage of owner-occupied residences will see an even further rate cut in 2026. Thus, for most Montana homeowners, this “reset” does nothing.

Rather, this provision is a clever attempt by wealthy out-of-staters to immediately cut property taxes for very high value properties, and yet, it will be everyday Montana homeowners who benefit the least and will feel the impacts of cuts in essential local government services.

4. CI-134 alters the state constitution and would create chaos in how Montana’s property tax system would operate.

CI-134 was initially drafted to cap local government budgets to not exceed a 2 percent increase each year, but the initiative language was revised to cap property taxes on a parcel-by-parcel level.

CI-134 purports to exempt public school levies, but it is not clear how schools will be impacted. CI-134 would essentially create two entirely separate property tax systems: one for schools and the state, and one for local governments. It is possible schools would continue to set their budgets and levy mills on property owners to reach that budget. However, for a local government, their budget, the millage system, and even the actual value of property become irrelevant for how local governments will impose property taxes. Even if the overall value of certain real property, including some large corporate centrally-assessed property, goes up or down, the local government is precluded from shifting property tax responsibility based on value of property, because they are limited for each parcel to 2 percent. CI-134 essentially disconnects the property tax system from property value for local governments, and it is hard to square how this will system will operate in tandem with property tax system for local schools.

While it claims to exempt public school levies, it is improbable that this level of reworking the entire property tax system wouldn’t impact school districts to some extent. Furthermore, the Legislature will be faced with the immediate cut of nearly $200 million to local public services, putting even greater pressure on the state to cover essential services while also meeting the needs of public schools.

Paid for by Montana Budget & Policy Center. Heather O’Loughlin, Treasurer. 15 W. 6^th Ave., Helena, MT.