Commission agenda includes setting public hearings on taxes and budget for July 16
During the July 2 meeting, City Commissioners will be asked to set public hearings for July 16 on the resolution of intent to raise property taxes; the budget; and other assessments, including the park maintenance district.
To catch up on the proposed budget, here’s our previous coverage:
Under state law, the city can raise property taxes by one-half the average rate of inflation for the prior three years.
For fiscal year 2020, which started July 1, the allowable inflationary adjustment is 1.02 percent, according to the Montana Department of Administration.
For the City of Great Falls, that equates to $168,142 of additional revenue for the general fund.
State law also allows municipalities to increase property taxes for premium contributions for employee health insurance benefits.
The city is proposing a 2.79 percent property tax increase that would provide $460,000 in additional revenue to help offset the cost to the general fund. Health insurance premiums increased 10.6 percent for the new fiscal year.
The total proposed allowable property tax levy increase is 3.81 percent.
The July 16 public hearing will be on the intent to raise property tax, but the commission will have to take additional action to set the mill levy, which happens after the city receives its certified taxable value from the Montana Department of Revenue in August.
For a residential home in Great Falls with a taxable market value of $100,000, the proposed inflationary increase equates to about $2.33 and the permissive medical levy to $6.38 for an annual tax increase of $8.71 for the new fiscal year, according to the city finance office.
The increases would generate about $682,142 in revenue for the general fund, according to the finance office.
According to the city, if the taxes aren’t increased, the city would need to determine alternative revenues from non-property tax sources or cut the budget by $628,142.
The general fund balance is projected to be $5.8 million, or 17 percent of expenditures, at the end of fiscal year 2020 without any additional use of that fund balance.
City policy is to maintain at least a 22 percent fund balance, which is about two months of operating expenses, to ensure cash flow and handle any unexpected expenses.
The Calumet Montana Refining tax protest will cause the fund balance to fall below the 22 percent fund balance, but the city finance office said that once the protest is settles, the fund balance should return to the recommended level.
In the proposed budget, the park district would remain at $1.5 million.
The annual assessment is based on the taxable value of each parcel within the citywide district to make the total $1.5 million.
The city doesn’t typically receive certified taxable valuations from DoR until August, but the finance office estimated based on last year’s valuations that the annual assessment on a $100,000 market value property would be $27.42.