City Commission approves budget, intent to raise taxes

City Commissioners voted unanimously during their July 19 meeting to adopt the budget and their intent to raise property taxes.

During the meeting, several said they were opposed to raising taxes.

Mayor Bob Kelly said they hear those concerns, but wish they’d seen more participation in the budget process.

They’ve had multiple public meetings to discuss the budget for months and there were a total of three members of the public during the budget work sessions.

City budget: Key things to know

Municipal governments are limited by state law on how much they can raise taxes annually and the rate is half of the three year average rate of inflation. That typically doesn’t generate much in terms of new tax revenue for the city, but as the national inflation levels rise, those figures could also increase.

The city did not take the inflationary factor for the last two budget years due to COVID and “is unable to provide the same level of service while not utilizing the inflationary factor for a third discal year and is therefore recommending the full use of the inflationary factor…which includes carryover mills from the prior two years,” according to the staff report.

Public hearings on city budget, tax increases upcoming

For the fiscal year that began July 1, the allowable inflationary factor is 1.77 percent, which equates to $306,901 of additional revenue for the general fund.

For the budget year than ended June 30, 2022, the allowable inflationary factor was 0.93 percent, which equates to $157,843 of additional revenue.

City Commissioners supporting tax increase in proposed budget

For the budget year that ended June 30, 2021, the allowable inflationary factor was 1.05 percent, which equates to $176,947 of additional revenue, according to the city finance office.

Those three years combined totals $641,691 in additional revenue for general fund services, which include public safety.

City continuing budget discussion

For comparison, the cost of a new fire engine is about $750,000, according to Great Falls Fire Rescue.

The property tax increases won’t be finalized until April when the city receives its certified taxable values from the Montana Department of Revenue.

City holding special meeting to discuss budget proposal

The city is projecting $22.9 million in tax revenue for the upcoming budget in the general fund, the proposed police and fire budgets are $27.4 million.

Staff is also recommending taking the permissive medical levy, for an additional 1.43 percent property tax increase, for health insurance premiums. That will provide $248,305 in revenue to offset those premiums, which increased three percent this year, according to the city finance office.

Commissioners review proposed city budget, tax increases

Commissioners approved taking the full inflationary increase, which is an $8.36 increase on a house with a $100,000 taxable value, according to the city finance office. It’s a $16.72 increase on a house with a $200,000 taxable value.

The full permissive medical levy, which would add $248,305 in new revenue, with an impact of $3.23 on $100,000 house and $6.47 on a $200,000 house.

City officials begin budget development discussion, tax increases likely

The total impact to a property owner with a residential home with a taxable value of $100,000 would be $11.59 for the year, according to the finance office.

Commissioner Rick Tryon said that their hands our tied and they don’t have many options.

They “either have to cut the level of service or raise the taxes,” Tryon said. “We honestly have no choice.”

The property taxes go into the general fund, which supports police and fire, as well as some other city functions.

“I understand it’s hard, but you gotta tell me what services you want to cut,” Tryon said. “We can’t do it.”