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New construction boosts taxable value across Missoula County by $6M

Budget

By Martin Kidston

Newly taxable property in both the city of Missoula and Missoula County came in strong this year – good news for taxpayers – though the county received a significant bump that has left local officials perplexed.

The Montana Department of Revenue this week released the taxable value of new property across the state. The figures place the taxable value of new construction at more than $6 million for Missoula County as a whole.

Break that down, however, and much of the growth in newly taxable property took place outside the city of Missoula. The county saw its value on new properties increase $4.3 million while the city, which is awash in a building boom, landed at just $2 million.

The figures represent new properties that came online by Jan. 1, midway through the last fiscal year.

“It’s a big increase that happened in the county, and it would have happened about a year-and-a-half ago,” said Andrew Czorny, the county’s chief financial officer. “I’m not certain where those big increases came from, because it would take a big market value change in constructed property to generate that much taxable value.”

The jump for Missoula County is the largest it has seen in several years and represents a 167-percent increase over the prior year. Over that same time, however, the city saw its taxable value decrease by nearly 6 percent.

“Considering how much development has been happening in town, we were a little surprised that it was $130,000 lower than last year,” said Leigh Griffing, the city’s finance director. “We also understand there’s a lot of timing that results in when and how these numbers are released.”

Despite the slight decrease for the city this year, Griffing said Development Services continues to see robust building activity. As of June, the city reported more than $61 million in new construction, and several recent projects, along with those currently under construction, have not been added by the state as taxable properties.

“Taxable values came in a little under our estimate, but we continue to see strong development happening in Missoula,” said Griffing. “We would expect similar or better values for newly taxable property in Fiscal Year 18.”

Both the city and the county are in the process of crafting their budgets, and the figures could play a role in their outcome.

The mayor’s office crafted a proposed budget based upon a projected 2 percent increase in taxable value, Griffing said. The figures released by the state come in below that at around 1.6 percent.

“Council continues to debate the budget with that in mind,” Griffing said. “They’re still looking at approving a budget with a similar tax increase of what the mayor brought forward, which is approximately 3.5 percent.”

Czorny said the county also proposed a budget based upon a projected 2-percent increase in newly taxable properties. The higher-than-anticipated figures for the county may be good news for county-wide taxpayers.

“I believe we’ll be able to relieve some of the tax burden with that,” Czorny said, adding that the county’s growth was likely related to centrally assessed properties related to NorthWestern Energy.

“We have some of those that are outside the city, and they’re big taxpayers,” Czorny said. “Perhaps that’s where the growth took place, because I don’t think a lot of new building took place outside the city.”

The City Council will hold a public hearing regarding the proposed budget on Monday before going back to the Budget Committee of the Whole to fine tune it. The county is also working to adopt a final budget.

Contact reporter Martin Kidston at info@missoulacurrent.com