Citing a lack of participation and new alternatives, the Missoula City Council on Wednesday revoked a 2016 resolution that established a property tax relief fund intended to be fed by private donations.
But after eight years and no contributions to the fund – and with the Affordable housing Trust Fund now firmly established – council members opted to close the program and place the city’s focus elsewhere.
“I was on council when this was passed. It was brought back in 2016 with the best of intentions to create a fund to provide property tax relief,” said council president Gwen Jones. “It’s not working as intended, it hasn’t accomplished any of the goals, and it’s taking staff time when staff is already overworked.”
Known as Betty’s Fund, the program called for the fund to be funded by private donations from citizens. But instead of a growing balance, the program collected dust.
The city is now directing calls for relief to the state and its existing tax programs, including the Property Tax Assistance Program. While that program has its own flaws, it can provide relief on the first $200,000 of the market value of a primary residence. There are qualifying limitations and other requirements, however.
“We do point people toward existing property tax relief options, via the state,” said Leigh Griffing, the city’s director of finances. “Nonetheless, it’s very frustrating for citizens and staff to have to field those calls and not be able to help folks.”
While Betty’s Fund sat idle, the city launched its new housing program and, within it, the Affordable Housing Trust Fund. That fund has a balance of several million dollars and has proven to be an effective tool in addressing Missoula’s housing needs, council members said.
The fund also has the potential to grow and it’s where the city plans to place its focus.
“We have created this housing trust fund which is really functional, has staff support and has a great working board,” said council member Heidi West. “We’ve created a tool that maybe doesn’t work in the same way, but it has a lot more potential than this particular (Betty’s) fund has.”
Many council members in recent years have grown louder in their concerns and frustrations with the state’s existing tax system, saying it’s broken and is placing too much burden on property owners.
At the same time, it also leaves local governments unable to fund vital programs and services due to the system’s lack of taxing diversity.
“Until we have a more diverse tax base, we’re going to have property tax issues,” said Jones. “Until there’s some thoughtful tax reform at the state level, we’re on a bad trajectory. That’s really the bigger issue here.”