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Missoula Mayor Engen, city officials keeping tabs on GOP legislative proposals

Missoula Mayor John Engen attends the groundbreaking of a project that included public improvements funded with tax increment. The city of Missoula expects the Republican Legislature to target the popular program, potentially putting Montana’s cities at a disadvantage when competing for projects. (Martin Kidston/Missoula Current file photo)

With it being Democrat Mayor John Engen’s first term under a Republican governor in office since 2005, Missoula’s top official expects the city to play defense in areas during the upcoming 2021 legislative session.

“We’re largely focusing on making sure that we don’t lose ground with regard to local control and revenues, so those issues are always critical for us,” Engen said. “We will need to protect the revenue streams so that we’re not in a position of further relying on property taxes to operate the essential services. And then we’ll need to pay attention to the changes.”

Under a Republican 67-33 supermajority in the Montana House and a 31-19 majority in the Senate, one agenda by GOP lawmakers looks at reducing local control in towns and reducing the capability of tax increment financing.

The majority party wants to keep the use of tax increment financing from getting “out of control” by capping it and and ensure it’s not used to “skirt County and State taxes by local governments.”

Engen, a proponent of tax increment financing, said the tool and how it’s used is often misunderstood, even by lawmakers.

“It’s a great development tool and it’s a great investment tool for municipalities, but it’s certainly gotten a bad rap,” Engen said. “I do actually believe that it is misunderstood to a great degree. And therefore, folks want to get rid of it. But the fact of the matter is if we get rid of that tool, I believe that communities like ours will have fewer incentives for creating quality public spaces around private development.”

As with every legislative cycle, the city will advocate for a set of resolutions they collaborated with the Montana League of Cities and Towns on.

The 12 resolutions include everything from expanding mill levies, increased support of multi-modal developments, streamlining granting of local infrastructure funding, opposing local contributions to public employee retirement systems, and more.

“They’re pretty general, in no small part because we don’t know what the thousands of bill drafts hold for us,” Engen said. “There are many placeholders by legislators right now.”

Members of the Montana League of Cities and Towns will also advocate for a local option tax, which essentially would be similar to a resort tax available as an option voted on by citizens.

Some Missoula City Council members have recently expressed support for the local option tax in city council meetings, with it being viewed as a way for more local income outside of property taxes.

While Engen supports the idea, he said it is unlikely such a tax will pass during this legislative cycle. The idea of the tax has failed in the Legislature for decades.

“We think there’s a lot of money left on the table. It could be used as it is in other communities in the state before property tax relief,” Engen said. “We will once again ask the legislators to allow us to put that question in front of our local voters and make their own decisions. And we’ll see if we get anywhere. We haven’t been successful over the course of the last 30 years, but hope springs eternal.”

Overall, Engen said their approach with lobbying is to just approach anyone is willing to listen.

“We’re in a bit of a blue bubble here in Missoula and I think the vote counts confirm that. But I also think Missoula is actually a little bit more moderate than the rest of  the state gives us credit for being,” Engen said. “We will continue being open-minded and willing to work with just about anybody who wants to listen and have productive conversations about the way we serve.”

With the possibility of reduced funding in the legislative cycle, Engen hopes Governor-elect Greg Gianforte recognizes some of the local challenges that cities face in regards to what gets passed during the legislative cycle.

“I hope that the governor-elect and his team are paying attention to what’s happening in cities in Montana because there’s a lot of really good things happening for our residents,” Engen said. “We’re great distributors to the autonomy of the state, but we also have some challenges that are a little bit unique to municipalities as well. We’re certainly hoping the governor can recognize some of those unique challenges and help us deal with those as well.”