County forms reserve account to cover loss of large taxpayers

Martin Kidston

(Missoula Current) As required by state law, Missoula County this week established an account to place into reserves funding that could be used to offset the loss of taxes if a major county taxpayer closed or left.

The Legislature in 2025 passed Senate Bill 117, which permitted counties and cities to create a Large Taxpayer Reserve Account. Funding from the account can only be used to offset the impact of lost taxes stemming from the closure of a top taxpayer.

“That's designed so if a county loses one of its top 20 large taxpayers, then those funds can be used to offset over the period of 10 years the impact to the other taxpayers in that jurisdiction,” said county CAO Chris Lounsbury. “It can only be used under the circumstance where we lose one of the top 20 taxpayers in the county.”

Lounsbury said funding for the Large Taxpayer Reserve Account will come from newly taxable property within the county. The funds can be used to pay for “outstanding capital project bonds” or other expenses incurred prior to loss of the taxpayer.

According to the county, the funding can also be used to attract new industry, to expand the employment base in the impacted area, or to invest in infrastructure directly related to new development or housing.

The account is considered restricted to specific uses related to the loss of the large taxpayer.

“If such a terrible thing were to happen, this fund would lessen the burden on existing taxpayers,” said Commissioner Josh Slotnick. “That's what this is for. If a major taxpayer or industry leaves, this fund allows the remaining taxpayers to not have to cover that loss entirely. It's not a fund we can use for anything else. It's restricted.”

The county on Thursday adopted its FY 27 budget and also passed the resolution forming the Large Reserve Taxpayer Account. The county directed roughly $20,500 into the countywide account and $3,100 into the county-only portion.