Montana counties see double-digit property value increases; will higher taxes follow?
(KPAX) In Montana’s most populous cities and counties — and in some smaller counties as well — reappraised residential and business property values that determine property taxes often increased by double-digit percentages this year.
But those increases won’t necessarily lead to comparably higher property taxes unless your increase was above the county-wide average, local officials told MTN News.
“What many counties would do, and certainly this county, most likely will be to reduce the number of mills, so people’s taxes don’t get the huge bump,” said Lewis and Clark County Commissioner Susan Good Giese.
Statewide, residential property values this year increased an average of 12.5%, in the Revenue Department’s biennial reappraisal. For businesses, the average increase was nearly 10%.
The department mailed notices of the reappraised value to property owners several weeks ago.
The state and local governments, including cities, counties and schools, apply mill levies to those values, to calculate a property owner’s taxes for the 2019-20 fiscal year. If the mill levy stays the same and your value went up, your taxes will increase. But if mill levies are reduced, your taxes can stay the same, increase less than your value increase, or even decline.
And in areas where reappraised property values declined — such as a dozen rural counties, primarily in eastern Montana — local governments can increase mill levies to capture the same amount of revenue as the previous year. Or, if the mills in these areas stay the same, your taxes likely will decline.
Still, for most residents of the state, appraised property values increased during the last two-year reappraisal cycle.
The biggest increase for a large county occurred in the state’s fastest-growing area: Bozeman and Gallatin County, where residential values climbed an average of 23% and commercial property increased an average of almost 20 percent. Those numbers from the Revenue Department include the value of new construction, so the increase is not entirely on existing homes and businesses.
Neighboring Madison County saw the biggest average increase of any county for residential property, at nearly 29%. The largest average increase for commercial property came in another southwestern Montana county: Park County, at 27%.
Other counties that saw relatively big increases in average value for residential property were Blaine (20%), Park (19.5%), Chouteau (19%), Broadwater (15%) and Judith Basin (13.5%).
Average increases for residential property in the most populous counties ranged from 7% in Yellowstone County to the 23% high in Gallatin County. Ravalli County clocked in at second-highest in this group at 12.3%, Missoula was 12.1%, Flathead 11%, Lewis and Clark at 9.5% and Silver Bow and Cascade counties at about 9% each.
The value of commercial property in these counties also increased, but generally at a lesser amount — except Missoula County, where the average value of commercial property increased nearly 18%.
The four main entities that receive property-tax revenue are school districts, cities, counties and the state. Mills levied by the state, primarily for education, are unchanged.
Cities and counties cannot increase their general-fund budget by more than half the rate of inflation (about 1% this year) and therefore don’t get a windfall from increased property valuations – unless it’s new construction.