A week or so before Greg Gianforte assaulted a reporter and won an election, I reported on his failure to pay adequate taxes on a parcel of land near Bozeman. The parcel, as I noted then, was a 5.01 acre lot that was somehow characterized as a piece of non-qualifying agricultural land, which meant that even though the neighboring land was valued at $121,488 an acre, Mr. Gianforte’s lot was valued at $223 total, or just over $50 an acre.
That valuation difference meant thousands of dollars in tax revenue lost to the state of Montana and Gallatin County. As I pointed out later that week, the taxable value on Gianforte’s land was about $50/year, while a parcel 3/5 the size of Gianforte’s right across the street had a taxable value of about $4,300.
Gianforte’s land was given the lower valuation because the law in Montana is designed to protect ag producers. But for a period of five years, the parcel was neither large enough nor produced anything of agricultural value, meaning that Mr. Gianforte was paying an artificially low valuation.
I learned today just how low that valuation was. A review of the Montana Cadastral system shows that the real value of the land in the 2017 tax year is $566,785, a difference of roughly $566,000.
Nothing changed on the land. There are no structures nor businesses that have increased its value; it’s simply being assessed properly.
Shortly after my story broke, there was one story in Montana media about the valuation of Gianforte’s land, from MTN News. In that piece, which focused largely on questions about Rob Quist’s finances, the Department of Revenue offered a peculiar explanation, saying that the valuation was correct because they had failed to send Mr. Gianforte a postcard reminding him to tell the truth about his land:
The agency said it should have sent Gianforte a postcard in 2014, when the property was divided from other nearby land, to ask for updated proof that the land is still being used for agricultural purposes.
Revenue officials said the lack of a request was an oversight, and that they sent the postcard this week.
That’s peculiar on a number of points. First, there’s no indication that the land was ever used for agricultural purposes. Second, it’s a fascinating argument to suggest that a property owner is absolved of responsibility for properly characterizing land if a post card isn’t sent to remind them to tell the truth. I’ve got a call into the Department of Revenue to learn if this is standard practice, something I suspect a lot of developers on the edge of Bozeman would take advantage of if they could.
It also suggests a rather implausible story about Mr. Gianforte, a property owner and developer who owns other lots in Gallatin County. We’re to believe that this self-proclaimed businessman and expert in finance, a man who kept arguing his attention for detail would make him an excellent governor, never thought it strange over a period of years that a prime piece of real estate was being valued at less than a tenth of a percentage of its real value and never thought to check that valuation with the state.
And of course, it’s impossible to ignore Gianforte’s tax payments in the context of the larger coverage of the race, especially from the Lee Newspapers, which featured stories about Mr. Gianforte’s opponent (Rob Quist)’s finances at every opportunity. One especially egregious story, by the Gazette’s Tom Lutey cited a former Republican legislator, who, without evidence, asserted that a barn owned by Mr. Quist must be worth more than Quist claimed because of some potential rental activity at the site.
That story was so poorly written and vetted that the Gazette was forced to run an op-ed piece written by a real estate attorney that opened “it didn’t take me long to realize the reporter, Tom Lutey, doesn’t understand property rights and taxation law; in fact, even the headline was incorrect.”
The reporting never quantified the amount of potential tax revenue lost and it certainly didn’t prove that Mr. Quist was evading taxes.
And yet, neither Mr. Lutey nor the rest of the Lee political reporters ever covered the Gianforte tax situation on his land, even though sources make it clear they were provided the information and given the half million dollar difference in valuation it was clearly a more significant story than whether or not Rob Quist rented out his barn, a story, incidentally, that he credibly refuted.
And that’s an astonishing level of malfeasance, one that I believe affected the race at some level. While voters in the state’s largest newspaper markets were treated to an endless parade of shoddy opposition stories about Rob Quist, they never learned from those same papers that Greg Gianforte had terminated an employee with M.S. or that he was paying far less than his share of taxes. It’s hard to understand how the stories about one candidate’s past were legitimate and those about the other were not.
In the end, I’m glad that Mr. Gianforte will finally have to pay his fair share of property taxes this year, even if he has, for years, failed to pay his due. Heading into another campaign cycle that is likely to be covered by an even smaller number of political reporters, I’m hopeful that this past special election will serve as a wakeup call about the issues that matter and the way those are covered.
I’m just not terribly optimistic that it will get any better or that readers, like the State of Montana in this case, will get their money’s worth.