City Commission scheduled to set tax levy on Tuesday
City Commissioners will set this year’s tax levy during their Aug. 21 meeting.
Commissioners passed a resolution in July of their intent to raise taxes and now that the city has received its taxable valuation from the Montana Department of Revenue, it can set the mill levy.
Under the adopted budget, the city will increase taxes $6.14 for the year on a home with a taxable value of $100,000. That includes the inflationary factor and the permissive medical levy.
The inflationary factor will generate at estimated $127,721 and the permissive medical levy will generate $300,000.
The budget includes a 5 percent increase for water, 2 percent increase for sewer, 10 percent for storm drain and 5 percent for commercial sanitation. Those proposals will come before the City Commission for public hearings on Sept. 18.
The city received a taxable valuation on July 30 and a revised valuation on Aug. 6.
The city finance department estimated, based on the 17-year average, the city’s newly taxable property revenue would be about $400,000. According to the revised valuation from the DOR, the newly taxable revenue $689,968.
No particular project could be identified to attribute the newly taxable revenue, according to city staff.
That means the city will have more than the projected $289,968 of tax revenue, or about two percent of the general fund tax revenue.
But all of that newly taxable revenue might not make its way to the city coffers since some will likely be tied up in tax appeals and abatement requests.
Melissa Kinzler, city finance director, often cautions commissioners from getting too excited about any bump in newly taxable revenue since it can take time for the city to see it.
For example, during the last fiscal year, the newly taxable property revenue was certified to be $437,295 and the city has not yet received that additional revenue.
Tax appeals can take years and while anyone appealing still typically has to pay their taxes, it’s usually held in a separate account until the appeal is resolved. Budget and revenue officials have told The Electric that municipalities can use that money but then run the risk of having to pay it back depending on the outcome of the appeal.
According to the city finance office, the newly taxable property increased the taxable value per mill from $94,164 last year to $109,457 for this fiscal year, indicating that the tax base has expanded.
That’s a benefit to the Great Falls Public Library since the library receives nine mills under the agreement with the city. The newly taxable value means an additional $137,637 for the library during this fiscal year.
Library Kathy Mora said the revenues may enable the city to hire the part-time position she requested in the budget, but didn’t get. Whether the library will be able to reopen on Mondays is still up in the air, Mora said, until they actually see revenues that will support the additional operating hours.
Debt service for the soccer park is also included, with 1.56 dedicated mills, which has an increase of $6,908 this year. The annual debt payment is $169,751. The soccer park bonds were issued in 2004 for $2.5 million and were refinanced in 2014.
As of June 31, the outstanding balance for the soccer park bonds was $910,000 with a 2024 maturity date.
The golf debt was paid off in 2016 and the swimming pool debt was paid off during fiscal year 2017.
State law requires the city to adopt the budget, and set the mill levy amounts, before the first Thursday after the first Tuesday in September or 30 days after receiving taxable valuation from the DOR, whichever is later.