Supreme Court won’t intervene in constitutional property tax question

Jan 19, 2022

Daily Montanan

The Montana Supreme Court has left a constitutional ballot issue in legal limbo, rejecting a plea from the group to intervene in a case where a Lewis and Clark County judge has issued a temporary restraining order halting signatures on a measure that would cap property taxes.

On Wednesday, the state’s high court declined to intervene in the case of Constitutional Initiative 121, which would cap property taxes, saying that it could not handle the case faster than the district court, which will hear the matter Monday. Furthermore, it said that an emergency hearing on the 10-day temporary order could have been requested sooner if the Montana Property Cap Initiative wanted.

However, supporters of the initiative have said that because constitutional ballot initiatives are time-limited, meaning they must collect thousands of signatures in a specific time, the court action has dealt a crippling blow to the measure.

Originally, Lewis and Clark District Court Judge Michael McMahon issued the order, based in part because the Montana Federation of Public Employees claimed that Montana Secretary of State Christi Jacobsen had not forwarded the initiative to an interim revenue committee, and that Montana Attorney General Austin Knudsen had not determined whether the measure affects business interests, something required by legislation passed in 2021, Senate Bill 651.

Matthew Monforton, an attorney for the initiative, said those reasons are a misapplication of law, though, and apply to statute initiatives, not constitutional measures.

When contacted Thursday, both Jacobsen and Knudsen’s offices said they believe CI-121 meets the legal requirements for signature gathering. Furthermore, the Attorney General’s Office exercised its right of judge substitution and the case is now scheduled before Judge Christopher Abbott on Monday.

CI-121 is meant, in part, to combat soaring property values in Montana, which likely mean a corollary spike in property tax. The property cap initiative would limit increases to no more than 2 percent per year, only resetting on personal property when it is sold.

Supporters of the initiative have until July 15 to gather more than 60,000 signatures from Montana voters.

Statutory initiatives — or initiatives that would be incorporated into law if they’re successfully passed — require the petition to go to a legislative committee for a non-binding vote, prior to approval. They now also require the Attorney General’s office to make a determination if the measure affects business. However, a constitutional measure is different, Monforton and the state argue, because those measures don’t just change a law, they change the state’s constitution.

In a “legal sufficiency review” by Knudsen’s office, attorneys advised Jacobsen on Dec. 22, 2021, that CI-121 was sufficient for the ballot, and pointed out that it was not required to give an opinion because the matter involved changing the state’s constitution.

“The overriding presumption must be that Montanans enjoy the ability to amend their constitution,” the opinion said. “The Attorney General cannot make such a finding because the plain language of the statute applies this provision only to statutory initiatives not constitutional initiatives. Instead, the Attorney General simply recognizes the Legislature delegated limited authority to the Attorney General and that delegated authority does not include the power to make a ‘significant material harm’ determination for constitutional initiatives.”

The memo to the Secretary of State’s Office also said that “multiple interested parties” reached out to Knudsen’s office as the measure was being reviewed, lobbying the attorney general to make a statement that CI-121 “causes significant material harm to one or more business interests.” Those groups included the Montana Farm Bureau Federation, Montana Infrastructure Coalition, Montana Budget and Policy Center, Montana Association of Realtors, MFPE and the Montana Chamber of Commerce.

Still, Knudsen’s office said despite the lobbying, the law doesn’t require or even allow for the finding.

On Thursday, a spokesman for Jacobsen’s office confirmed their understanding was the same, and certified the measure.

Monforton said the measure was blocked by a misreading of the law, and McMahon issued the order without allowing a hearing on the merits.

“What this shows is Helena’s liberal establishment is terrified of meaningful tax reform,” Monforton said. “Every day is losing a day we don’t get back and they’re hoping to drag it out to effectively kill it.”

He also raised other constitutional issues by the delay, saying that supporters of the measure can’t have their voices heard or due process by the restraining order.

“If the state judiciary continues to run roughshod over the homeowners First Amendment rights, then we will seek judicial relief in a different forum,” Monforton said.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.