City Commissioners will be asked during their July 2 meeting to set a public hearing on the budget and increasing property taxes for July 16.

They’ll be continuing their budget discussion during the work session on July 2.

As part of the budget process, the commission must hold public hearings on their intent to increase property taxes and the budget.

Under state law, municipalities and counties can only increase property taxes by one half the average rate of inflation for the prior three years.

The allowable inflationary factor this year is 2.8 percent, according to the Montana Department of Administration, which equals $562,520 of additional revenue for the general fund.

Commissioners opted to take the full inflationary factor including carry over mills for fiscal year 2023 and again for fiscal year 2024, which ended June 30.

City takes first look at proposed budget, with tax increases

State law also allows municipalities and counties to increase property taxes for the permissive medical levy, which helps offset insurance premium costs for employees, and city staff are proposing a 1.58 percent increase, which equates to an additional $317,544 in the general fund, according to city staff.

The city’s health insurance premiums have increased 12 percent for the fiscal year that began July 1, according to the city finance office.

Staff is proposing taking the allowable tax increases, which total 4.38 percent.

The commission is set to conduct the public hearing on the intent to increase property taxes on July 16, but the increase won’t be final until after the city receives its certified taxable value from the Montana Department of Revenue in August and the commission takes further action.

Montana Renewables, Calumet have pending tax appeals before state board

If approved, the annual tax impact for a residential property with a $100,000 taxable market value would be $5.76 for the inflationary factor and $3.25 for the permissive medical levy for a total of $9.01.

The total impact would be $18.02 for a $200,000 home; $27.03 for a $300,000 home; and $54.06 for a $600,000 home.

The tax increases would generate $880,064 in additional revenue for the general fund.

New aquatic facility set to open late June; city amending its budget, holding frog slide naming contest

Options other than raising taxes include reducing proposed expenditures by $880,064 or using fund balance to offset the deficit.

City staff already used $444,405 of fund balance to balance the general fund for the new fiscal year in their proposed budget.

Public safety departments requested $793,488 in additional resources for the current budget, which includes few items that had been proposed in the safety levy last year that voters denied.

City beginning budget process

Of those requested items, the city manager recommended funding zero for Great Falls Fire Rescue; $1,000 for Municipal Court; $40,286 for the Great Falls Police Department; and $40,000 for the city legal office.

The general fund is projected to have a $9,912,051, or 24.5 percent of expenditures, by the end of the fiscal year that will end June 30, 2025.

The city’s policy is to maintain a minimum of 22 percent fund balance in the general fund.

City provides quarterly budget review, financial position

City staff said during the June 18 work session that they were recommending the higher fund balance since they’re anticipating a continued significant tax protest.

During the fiscal year that ended June 30, the city didn’t collect about $1.1 million in property taxes due to protests and appeals. The process to resolve tax protests and appeals can take years.