City to set tax levy on Tuesday

During the Aug. 20 meeting, City Commissioners will be asked to set the tax levy for this budget year.

The city received its taxable valuation from the Montana Department of Revenue on Aug. 5 and can now compute and set the annual mill levy.

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During the budget process, the finance department estimated the city’s newly taxable property revenue would be $425,000 for fiscal year 2020, which began July 1. The projection was based on the 18-year average of newly taxable property.

The newly taxable revenue reported by MTDOR is $199,839. No particular project can be identified for this newly taxable revenue.

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The total mill levy for the current budget year is 200.78 mills totaling $20,384,444.

As proposed, the projected impact on a home with a taxable market value of $100,000 is:

  • inflationary adjustment: $2.33
  • permissive medical levy:  $6.38
  • total: $8.71

The newly taxable value revenue of $199,839 may result in a decrease of $225,161 in undesignated fund balance for the general fund since it’s less than the budgeted amount of $425,000.

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The city also anticipates property tax appeals and abatement requests, meaning the city won’t definitively know how much of the new tax revenue will be available until those appeals and abatement requests are processed.

For example, last year, the newly taxable property revenue was certified to be $781,414, and the city has still not received this additional revenue.

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The newly taxable property increases the taxable value per mill from $97,185 last year to $101,525 this year, indicating that the city’s tax base has expanded, according to the finance department.

With the newly taxable value, the Great Falls Public Library will receive an additional $39,060 under the agreement in which the library receives nine mills annually.

Included in the mills are:

Debt Service

  • 1.68 mills for soccer park debt service payments, a minimal decrease from last year. The annual soccer park debt payments with expenses total $167,043, which are included in the $20,384,444 mill levy total. The soccer park bonds were issued June 14, 2004, for $2.5 million for 20 years and refinanced in April 2014. The outstanding balance of the soccer bonds as of June 30 was $765,000. The bond maturity date is July 1, 2024.
  • Fiscal Year 2017 was the last year for the swimming pool debt.

Permissive Medical Levy

  • 33.11 mills, a $460,000 increase from last year

Last year’s mill levy was for a certified revenue of $19,557,045. The differences between last year’s mill levy of $19.6 million and this year’s $20,384,444 include:

General

  • $199,839 for newly taxable property,
  • $168,142 for the inflationary adjustment,
  • $460,000 for the “Permissive Medical Levy,” and
  • $(391) from previous taxable value adjustments.

Voted General Obligation Debt

  • $(191) for the revenue needed for the soccer park debt.

State law requires the city to adopt a budget and set the mill levy amounts on or before the first Thursday after the first Tuesday in September or 30 days after receiving taxable valuation from MTDOR, whichever is later.

Commissioners could reduce the amount of either the inflationary factor or the permissive medical levy, or accept the levies as presented, let any tax appeals or abatement requests to run their course and adjust the budget if needed after Jan. 1.

“This timeframe also provides the City Commission with ample time to review, consider, and prioritize any shortfalls from the slight decrease of the General Fund balance. Budget adjustments can then be made as necessary with review from city department heads and the public,” according to the finance department’s staff report.