CI-121 petition would hurt small businesses

Hello to all,

Constitutional Initiative 121 or CI-121 is a proposed initiative petition currently circulating to gather enough signatures to qualify for the ballot this November. If asked, decline to sign the petition for CI-121! We must keep this misleading ballot initiative off the ballot. CI -121 is not in the best interests of Montanan communities, businesses, or schools. We need to protect new homeowners and keep families in their homes. Small businesses are already struggling. We need to protect them from a tax shift that could potentially devastate their livelihood, including small farmers and ranchers in our agriculture community. If CI-121 were to pass, it would be locked into our constitution, assuring that it would be very challenging to make further changes down the road. Legislative solutions to issues in our tax system are a better option.

CI-121 has the potential to transfer the tax burden from residential properties to other classes of property, which include businesses, centrally assessed properties (railroads, power companies, gas pipelines, etc.) and agricultural property owners. I do not believe we can afford to shift the burden onto these entities. Since COVID-19, many businesses took a hit financially. Many were forced to close their doors due to mandates, and supply chain issues plagued those able to stay open.

The Montana agriculture industry has also been hit hard. The drought we experienced last year devastated many farms and ranches and this year’s forecast does not look promising. Just as everyone is seeing rising costs at the store, we too are seeing it in the agriculture community. The input costs for fuel, fertilizer, chemicals, equipment, and parts are rising and, in some cases, have tripled since last year without an increase in cost of goods sold. We all need each other, and I believe we all need to share the tax burden fairly to keep our communities healthy and vibrant. CI-121 is not the answer.

The passage of CI-121 would have one of two results depending on the action of the next legislature: 1) property tax revenues collected would decrease in many areas or 2) property tax reductions to residential property would be shifted to other properties if the Legislature changes tax laws.

The first scenario would provide property tax relief to all property in larger cities. There would be some tax shifting to rural properties as schools and counties suffer from lower collections from properties within the city limits. Therefore, most counties and school districts would face lower revenue collections that our communities cannot afford to lose.

The second scenario will require the Legislature to make many statutory changes to implement CI-121 that will allow for some tax shifting from residential property to the other classes to allow funding to remain relatively stable for property taxing entities. This will be a complex endeavor as many issues would need to be addressed.

Why should you oppose CI-121? It will limit the tax exposure to those properties defined as residential by the state legislature. Montanan voters won’t know that definition prior to their voting on the initiative. CI-121 will allow for different tax burdens on similar residential properties. In all likelihood, the savings CI-121 affords residential property owners will be shifted to all other properties and could amount to over 150 million dollars. The proponent campaign is currently in the midst of collecting signatures to put CI-121 on the ballot this fall. If approached, decline to sign the petition for CI-121. We need to protect our small businesses, and homeowners—both new and old. If we don’t, we risk losing our communities.

-Joy DePuydt

Saco, MT

Montana Farm Bureau Federation District 7 Director