Gov. Brian Schweitzer's proposal to send resident homeowners a $400 check has struck a chord with many Montanans. After all, residential property-tax payers have generally been overlooked in tax-cut measures enacted over the past decade. As the Legislature meets amid a nearly $1 billion projected budget surplus, talk of a property-tax rebate for homeowners sounds good to many Montanans.
Perhaps to more Montanans than the governor intended.
Exactly how much of the tax windfall piling up in Helena ought to be divvied up to Montanans is a good question. The governor's proposal calls for distributing $100 million in the form of one-time payments of $400 apiece to some 250,000 households. One can plausibly argue that more people ought to share that amount, or that more money should be distributed to more people. But the argument that renters deserve the same property tax relief as homeowners is flawed.
The owners of property are legally obliged to pay property taxes. Those taxes are set by local and state government bodies, with additional amounts authorized by voters.
Renters pay rent. Rents are determined by market conditions that may or may not reflect taxes paid by the owner of the dwelling. It's true that landlords generally cover their own property taxes through rent received, but they are the landlord's taxes, not his tenants'.
Comparable situations abound. People who buy food don't get farm subsidy checks from the Department of Agriculture. The federal income tax code doesn't allow renters to take a home mortgage deduction, even though - as with property taxes - rents may indirectly help pay the landlord's mortgage interest. For that matter, the IRS allows people to deduct property tax for income tax purposes, but not if the tax bill goes to someone else. Nearly every good and service you buy indirectly contributes to somebody's tax bill, but there's an inescapable difference between the retail or wholesale price of an item and taxes. Needless to say, bankruptcy courts are filled with people and companies whose incomes and revenues failed to match taxes owed.
We're not saying Montanans who rent have no legitimate claim to a share of the projected state surplus. But if they want it, they really ought to campaign for the money to be distributed in some form - say, as some kind of per-capita payment. So long as the payments are intended to provide property tax relief, the rebates logically belong to the actual taxpayers.
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