Frontier Institute Calls for Expiration of the 6-Mill University Property Tax Levy

Statement from Frontier Institute

Frontier Institute Calls for Expiration of the 6-Mill University Property Tax Levy

Letting the 6-Mill Levy expire would deliver Montanans ~$35 million in much-needed property tax relief

HELENA (July 21, 2026) – Today, the Frontier Institute called for the 2027 Montana Legislature to allow the statewide 6-Mill University Property Tax Levy to expire as scheduled on December 31, 2028. Letting the 6-Mill Levy expire would provide approximately $35 million annually in tax relief for Montana property taxpayers.

“Letting the 6-Mill Levy expire is one of the clearest and most achievable property tax relief options available to the 2027 Legislature. While the amount of relief would be modest, letting this automatic property tax expire is a low-hanging fruit win for Montana property taxpayers that should be prioritized,” said Kendall Cotton, president and CEO of the Frontier Institute. “Instead of having an automatic dedicated property tax revenue stream, the university system should make its case for that funding through the same appropriations process as every other state priority. Lawmakers should determine the appropriate level of funding for universities within the bounds of a limited, conservative state budget.”

Background on the 6-Mill University Levy

• The 6-Mill University Property Tax Levy is a statewide property tax that funds the Montana University System (MUS). Revenue from the levy automatically flows into a dedicated state special revenue fund for the university system.
• The 6-mill levy currently generates approximately $35 million per year in dedicated, automatic funding to the MUS. This accounts for around 9–10% of total state funding for MUS, and around 1% of MUS’s total operating budget.
• The 6-Mill Levy is periodically reauthorized by voters every 10 years (last in 2018) and is currently scheduled to terminate on December 31, 2028 unless the Legislature re-refers it to voters.

Why Let the 6-Mill Levy Expire

1. Property Tax Relief: Eliminating this dedicated levy removes a property tax burden that has grown with rising assessments. This would provide direct relief to homeowners, farmers, ranchers, and businesses alike.
2. Accountability and Oversight: The 6-Mill Levy is automatically levied every year regardless of budget needs. An automatic levy reduces the incentive for the university system to prioritize how resources are used and to demonstrate results. Requiring the MUS to make its case for funding through the normal appropriations process increases transparency and legislative control over how taxpayer dollars are used. The Legislature, not an automatic property tax, should decide the appropriate level of funding for universities.
3. Fiscal Responsibility: The 6-mill Levy locks in automatic spending dedicated for the universities and therefore reduces the Legislature’s overall flexibility. Ending it returns more control over the state budget to lawmakers, allowing them to balance priorities like tax relief and university funding among other goals through the normal budget process. Higher education funding should be considered each biennium alongside other state priorities within the bounds of a fiscally conservative budget with growth limited to inflation, not dedicated through an automatic property tax.
4. Legislative Flexibility Preserved: The actual dollar amount the universities receive is and should remain a decision made by the Legislature during the appropriations process. Ending the dedicated levy changes the mechanism, not the Legislature’s authority to set funding levels.
5. Simplicity: All that’s needed to expire the 6-Mill Levy is for the 2027 mtleg to do nothing. No action required! The 6-Mill Levy will expire on its own if no action is taken to reauthorize it.

Fiscal Impact

• Ending the 6-Mill Levy removes a dedicated $35 million / year property tax revenue stream from the university system’s state special revenue fund.
• A smaller secondary effect involves certain oil, gas, and bentonite production tax distributions (around $2 million) that are currently tied to the 6-Mill Levy and flow to the MUS. These would shift toward the General Fund.
• Result: Net gain of about $2 million for the state’s General Fund, loss of $35 million state special revenue dedicated to the universities.

Key Questions:

Will ending the 6-Mill Levy cause a funding gap that must be backfilled by the General Fund, tuition hikes or something else?

No, ending the dedicated 6-Mill Levy doesn’t force a General Fund backfill or massive tuition hike. It simply means the university system would compete for the $35 million in state support previously received from the 6-Mill Levy through the normal appropriations process, like every other priority. The Legislature, not an automatic property tax, should decide the appropriate level of funding for universities within the bounds of a limited, conservative budget.