Montana is hot—and I don’t just mean the summers. Our state has become a top destination for business growth and new residents, many of whom are seeking refuge from places with more burdensome regulations or higher taxes.
This influx has brought some growing pains. Housing shortages and rising property values are now common throughout much of the state. And with healthy, expanding economies comes the need for population growth; the two are inseparable.
For generations, we’ve lamented a sluggish economy that didn’t generate enough well-paying jobs or opportunities. Now, Montana’s economy is evolving and diversifying—exactly what we’ve long said we needed.
But there’s a price to pay for this progress: higher property values, and with them, higher property taxes.
Montana’s tax structure is often described as a three-legged stool, relying primarily on income, property, and natural resource-related taxes. It’s no revelation that one of those legs—the natural resource sector—has been shrinking over the past 30 years.
As our traditional natural resource industries have declined, the tax burden has shifted to the remaining taxpayers. Last spring, we saw the closure of two major contributors to Missoula County’s tax base: Pyramid Mountain Lumber and Roseburg Forest Products. Beyond the tragic loss of jobs, the property taxes these companies paid will now shift to other businesses and homeowners.
This trend has been building for decades as our economy has transitioned from capital-intensive industries to service and professional sectors.
Add to that a global pandemic, the rise of remote work, and the undeniable appeal of Montana’s landscape, and we arrive at our current situation: housing shortages, rising property values, and a growing tax burden on lifelong residents and businesses.
Our property tax system, which leans heavily on capital-intensive industries, may have served us well in 1965. It is obvious that it is ill-suited for us in 2025 and will be even more draconian by 2035.
Put simply, our economy is evolving, and our tax structure hasn’t kept up.
Our elected officials are under intense pressure to provide property tax relief. However, without meaningful reform or new sources of revenue, all we can do is shift the burden—essentially re-arrange the furniture in the room. The temptation exists today and will only grow, to shift more of the burden onto businesses, particularly Montana’s large employers.
Shifting property tax burden does nothing to address the larger issue: an economy in transition, over 12 million annual tourists, and Montana’s changing demographics.
In hockey, they say: “Skate to where the puck is going.” We need to apply that mindset to Montana’s future by acknowledging our economic trajectory.
Our current property tax system was designed for an economy of bricks, mortar, heavy machinery, and capital-intensive industries like mining, timber, and oil and gas. But today, we are building a 21st-century economy with a 20th-century tax system.
Maybe… just maybe, it’s time to have an honest conversation about Montana’s tax structure.
Todd O’Hair, President & CEO
Montana Chamber of Commerce
