City Commissioners approved their tax levies during their Sept. 5 meeting.

City officials typically set their mill levies in August, but delayed the decision while awaiting details on a potential tax appeal from Calumet and Montana Renewables.

The city received its taxable valuation from the Montana Department of Revenue on Aug. 7.

This year, the city’s total mill levy is 200.72 mills, totaling $26,457,995.

Local officials waiting for details of potential tax appeal

That includes the general levy, which is previously and newly taxable property, the permissive medical levy, Great Falls Public Library mill levy and the soccer park general obligation bond levy.

The city’s total taxable value this year is $137,382,080 and the DoR provides no specific project or development for that increase, according to city staff. It was a reappraisal year and, according to the DoR, property values increased about 31 percent in Cascade County.

City approves budget, intent to raise taxes

The city’s newly taxable property values from DoR total $1,510,213, which is significantly higher than the finance department’s projection of $400,000. That projection was based on a 22-year average of newly taxable property and city staff said there’s no particular development project that can be identified for the spike.

Melissa Kinzler, city finance director, said that it’s the biggest increase in newly taxable property since they’ve been tracking it since 2002.

“This is an extraordinary amount,” she told commissioners during their Sept. 5 meeting.

The revenue over what was estimated and included in the adopted budget for the current fiscal year, which began July 1, will be used to offset any uncollected taxes, appeals or protests and/or contribute to the general fund’s unreserved fund balance. The proposed budget included using $998,064 of CARES funds to cover the deficit, according to staff, and the additional revenue will help cover that deficit.

The city’s fund balance policy is 22 percent and the adopted budget projected an ending fund balance of 17.6 percent.

City budget 2023: Key things to know

City officials are anticipating a property assessment appeals/abatement requests which means the city won’t definitively know how much of this new projected tax revenue will be available until those appeals/abatement requests are processed.

The DoR completed it’s informal internal review of Calumet and Montana Renewables and told city, county and school officials last week the valuation decreased slightly but by less than one percent, so a recertification wasn’t necessary. It’s still possible that Calumet and Montana Renewables could file a formal tax appeal.

County proposed budget available for public review

The city didn’t increase taxes for two years during the pandemic, but city officials said last year that wasn’t sustainable and used all available tax increases in the last budget, according to staff.

This year, commissioners adopted the budget using all tax increases available.

Those tax increases include:

• 1.25 mills for soccer park debt service payments, which equates to $164,770 to cover debt payments and expenses in the soccer park fund. This will be the last year for this mill levy. The soccer park bonds were issued in 2004 for $2,500,000 for 20 years and refinanced in April 2014. The outstanding balance of the soccer bonds as of June 30, 2023, was $160,000. The bond maturity date is July 1, 2024.
• 30.06 mills for the permissive medical levy, which will generate $3,962,345, an increase from last year of $353,043. It’s the maximum number of mills under state law that the city can take for the permissive medical levy.
• 17 mills for the Great Falls Public Library, which will generate $2,240,872. Voters approved increasing the library mills in the city charter from two to 17 mills for the operation, maintenance and capital needs of the library.

The city is also using the full inflationary factor, which is half of the average rate of inflation for the previous three years, which the Montana Department of Administration set at 2.46 percent for this budget year.

That increase in property taxes will generate $446,080 for the city general fund.

City Commissioners vote to send public safety infrastructure bond to the November ballot

For comparison, a new firefighter costs the city about $100,000 and a new police officer costs about $110,000, according to the figures in the proposed public safety levy.

Since property values have increased, the value of a mill increased, meaning the city has to levy fewer to generate its needed revenue. With the new certified values, the taxpayer impact has come down from the estimates using last year’s taxable values for the inflationary factor and the permissive medical levy.

The impact of the inflationary factor and permissive medical levy on residential property owners is:

The impact of the 17 mills for the library is:

Since the value of a mill increased, some citizens asked commissioners not to levy the full 17 mills for the library and only levy enough to generate about $1.5 million.

Commissioner Rick Tryon asked staff why the city doesn’t levy fewer mills for the library.

Kinzler, the city finance director, said that’s up to commissioners to make that decision, but that there are other factors to consider.

She said the shift from a general fund subsidy to the levy funds will affect the library’s cash flow.

Library working on levy implementation plan

Kinzler reminded commissioners that there could also be tax protests and the city may not receive all of the money projected by the DoR. She said the state has received a high volume of protests and those will also take time to resolve.

Tryon said that the library only asked for $1.5 million from the levy.

Kinzler said that was incorrect and that the library asked for 17 mills, which was an estimated $1.5 million based on last year’s tax figures.

Tryon said he had a problem with it but voted to certify the mill levy, including 17 mills for the library.

Mayor Bob Kelly said the library “never wanted to get a windfall,” but that they should stick with the 17 mills for this budget.

He said that they can review the levy again during the next budget process and that depending on numbers, they may not need to levy the full amount.

Kelly said that the city budget process is long and the budget discussions are publicly posted earlier in the process. He suggested that members of the public unhappy with the budget should attend those meetings, or review the documents, and submit comments earlier in the process.

Commissioner Susan Wolff said they should be exited about the growth in the taxbase evident in the uptick of newly taxable property. She said they should be happy that they can cover the budget deficit with those unexpected funds.