Montana House District 55 Update: What Montana's Aging Population Means for You
Last week, I participated in the Modernization and Risk Analysis (MARA) Committee, where we reviewed updated data from the Legislative Fiscal Division (LFD) on Montana’s changing demographics, income trends, and long-term fiscal risks. These trends directly impact property taxes, income taxes, school funding, agriculture, small businesses, retirees, and the long-term stability of our state budget.
According to LFD, 21.2% of Montanans are now over age 65, ranking us the 8th oldest state in the nation. In 2024, deaths exceeded births statewide. Population growth now depends almost entirely on net migration.
This means:
Fewer school-age children in many rural communities.
Increased demand for health care and senior services.
A growing share of retirement income compared to wage income.
For agriculture and small business owners, it means tighter labor markets and rising competition for the workforce. For renters and young families, it reinforces why housing affordability and wage growth remain critical priorities.
An Aging Tax Base
We also reviewed economic and income trends. Montana’s income tax base is aging rapidly. Tax returns with at least one filer age 65+ are growing much faster than those of younger filers. Because state and federal law provide additional deductions and preferential treatment for retirement income, filers over 65 generally pay less income tax than younger filers with comparable incomes.
Over time, this may slow income tax growth and increase revenue volatility, particularly as capital gains income becomes a larger share of collections.
Income Tax & Business Equipment Tax Reforms (2023 & 2025)
These demographic realities are important context for the income tax reforms we passed in 2023 and 2025.
In 2023, the Legislature reduced the top income tax rate and increased the state Earned Income Tax Credit, providing broad-based relief to working Montanans. We also continued the transition from seven brackets to a simplified two-bracket system, making Montana more competitive and easier to understand.
In 2025, we completed further rate reductions scheduled under prior reforms. Beginning in 2027, Montana will operate under a two-rate system of 4.7% and 5.4%, with significantly expanded lower brackets for both single and joint filers. This lowers marginal rates for many small business owners, farmers, and wage earners.
We also passed major business equipment tax reforms in 2023, dramatically increasing the exemption threshold for business equipment. This eliminated the tax burden for thousands of small businesses, farms, and independent contractors who previously paid tax on basic tools, machinery, and equipment. For many small operations in Carbon County, that means less paperwork, lower compliance costs, and more capital to reinvest locally.
These reforms reflect my consistent priority: lower rates for everyone rather than creating narrow carve-outs for select groups.
Migration Has Slowed
From 2020 to 2022, Montana experienced strong migration from other states. However, tax filer migration data now show that new resident growth has returned to pre-pandemic levels. We cannot assume the extraordinary revenue growth of recent years will continue indefinitely.
That is why I support structural reforms, including homestead tax exemptions, rather than relying solely on temporary rebates.
Long-Term Fiscal Risk
The Pew Charitable Trusts presentation to MARA highlighted that aging populations typically:
Slow income tax growth,
Increase Medicaid and health care costs,
Shift consumption patterns, and
Create workforce participation challenges.
Montana is not immune to these trends.
These discussions are exactly why I have focused on:
Homeowners: Structural property tax reform to protect primary residences and long-term rentals.
Agriculture and small business owners: Simplified tax brackets and higher equipment exemptions to lower operating costs, improve predictability, and increase competitiveness.
Healthcare: Sustaining our rural hospitals and networks.
Retirees: Fiscal discipline and reserves that protect fixed incomes from future tax volatility.
Young Families: Fiscal discipline and reserves that keep infrastructure sound and pay off debt instead of passing it on to future generations.
Demographics are not partisan, and ignoring them would be irresponsible. My commitment remains to data-driven policy that strengthens Montana’s financial position while protecting taxpayers in Carbon County.
If you would like to review the full MARA reports, they are available through the Legislative Fiscal Division website. You may also join my weekly email newsletter, where I share them directly.
Please reach out with any questions or feedback. It’s an honor to serve you.
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