Missoula County proposes 8 percent tax increase, blames Montana’s tax structure

Missoula County is proposing an 8 percent increase in property taxes to balance its new annual budget, and it's also calling on the state to fix what commissioners have deemed a broken tax system.

The county is set to adopt the budget on Tuesday.

“The cost of providing services through local government increases faster than our ability to pay for those costs,” said Commissioner Josh Slotnick. “It behooves us to come up with new ways to generate revenue beyond property taxes. Property tax as a tool is basically maxed out.”

The county is proposing a budgetary increase of 6.4 percent in Fiscal Year 2020, including a 5.2 percent increase in personnel costs and a 6.2 percent increase in operations.

Combined with a handful of new additions and investments, the overall tax increase comes to $3.8 million, or 8 percent. Voter debt service will decrease around $1.5 million as the jail bond and an old open space bond are retired.

“While the county is levying less mills, we're not levying less tax dollars,” said Andrew Czorny, the county's chief financial officer. “We still have tax increases within those mills.”

While the city enjoyed an $8.3 million increase in newly taxable property this year, based in part on steady investment in its urban renewal districts, the county didn't see that increase.

In fact, Czorny said, newly taxable property county wide decreased by $300,000, from $5.9 million in 2019 to $5.6 million this year. County only mills from newly taxable property fell 70 percent, from $1.6 million to $500,000.

“The disappointing part of that is that we had a decrease in newly taxable numbers,” Czorny said. “It means we have less people to share the tax burden with, and we continue to tax the people who have already been taxed. We need more of that newly taxable property to expand our tax base.”

Commissioner Dave Strohmaier said the county also saw reductions in other revenues, including the state's reimbursement for holding state inmates at the local detention center.

The decrease in newly taxable property didn't help either, Strohmaier added.

“We have not seen as robust a reflection of newly taxable properties and values in Missoula County overall as maybe the city of Missoula realized,” he said. “We see a number of businesses appealing their taxes, so that diminishes our revenue to some extent.”

As proposed, the 2020 budget amounts to roughly $189 million and includes a number of new hires, including a new deputy for the sheriff’s department, a new captain for the detention center, and new clerks for the treasury and motor vehicle departments.

It also includes a new building inspector, updates to computers and software, and investment in a new elections center planned on Russell Street.

Still, Strohmaier said, other requests went unfunded and some were reduced.

“We're pretty judicious and fairly modest in some of the budget requests we granted in this particular year,” he said. “There's a lot of need out there, and there's plenty more I would have liked to have done.”

Commissioners entered the budget process this year with sustainability and resiliency in mind. As proposed, they believe the budget is sustainable over the coming years and resilient, meaning this year's investments won't put the county at risk in the future.

Still, taxpayers will see an increase in their tax bill.

“We might have more ability to do things this particular year than what we're actually including in this budget,” Strohmaier said. “But if we do so, we might be putting ourselves in jeopardy a year or two or three from now, when we know there will be other costs, expenditures and obligations coming down the pike.”