Missoula County commissioners on Thursday adopted their fiscal 2019 budget with a property tax increase of 4.8 percent, leading them to suggest the time has come to explore other ways to raise revenue as a relief to property owners.
Of the 4.8 percent tax increase, 2.9 percent is attributed to the voter-approved library bond while 1.98 percent is associated with increases in county services.
Add it up and it accounts for a $28.89 increase in property taxes on a home valued at $200,000.
“Yes, if you take your taxes and divide it by 12, it’s a lot of money every month people are having to take out of their income,” said Commissioner Jean Curtiss. “I’m challenging people to start thinking about the other tools we don’t have in Montana.”
Those revenue sources include a local options tax and a sales tax, something city leaders have also suggested. Curtiss cited a recent study commissioned by the Missoula Economic Partnership which found that a quarter-cent sales tax in Missoula County would have generated $5.6 million in 2016.
Curtiss said most cities and counties have no way to collect revenue from state visitors beyond a small gasoline and lodging tax. Tapping the state’s visitors to help pay for essential services could provide relief to local property owners.
“You have to tie it to property tax, income tax, and reduce those things,” Curtiss said. “You can’t just add a tax, for sure, but we have to talk about it. We have 11 million visitors that come to Montana every year and spend $1,000 a day or more, and we’re not getting any of that to provide all the services.”
Commissioner Dave Strohmaier agreed.
“We need to provide essential services to (tourists) along with residents, but unfortunately, those folks are contributing very little to our government operations,” he said. “They might drop some money into lodging or other travel-related expenses, but they’re not directly contributing to their impact on roads, their impact on our sheriff or 911 system, or any other service they might be tapping into.”
The county budget adopted Thursday increases the number of mills by 11.07, including 6.59 mills for the library bond and 4.48 mills to fund increasing costs in county services.
Like the city, which has proposed a tax increase of 3.8 percent, the county didn’t realize the increase it was expecting in taxable values released this month by the Montana Department of Revenue.
But this year’s potential tax increase by the county was softened in part by two unexpected revenue sources, including $600,000 in savings that came from deputies with the Missoula County Sheriff’s Department after they opted out of Social Security, thereby reducing the county’s match.
The county also received $502,700 from the city of Missoula when it chose to make a one-time remittance in tax increment from its urban renewal districts to cover this year’s budget. Of that, commissioners said Thursday, 60 percent will be used to reduce property taxes and 40 percent will be used for building maintenance.
“I hope you realize we spent months on this budget, trying to figure out what services in this community we can do without,” Curtiss said. “We don’t grant every request.”
Cuts in state government have also emerged as a challenge to Montana counties, including Missoula. Those cuts cross the board, from expert witness fees to targeted case management. The state also cut to $69 the amount of funding it reimburses Missoula County for housing state inmates, even when the cost of doing so is much higher.
Commissioners warned late last year that cuts at the state level would trickle down to counties. In the end, they said, it’s taxpayers who make up the difference.
“When the state says, ‘Good for us, we made cuts,’ it’s more often than not passing on unfunded mandates down to the counties,” Commissioner Cola Rowley said. “We can’t get out of paying for things.”
Curtiss offered similar sentiments.
“The state made cuts on the backs of all of you,” she said. “While the state has other things it can do to raise taxes to finance services, the only tool cities and counties have is property tax.”
Those who showed up at the city’s budget session on Wednesday to protest higher taxes didn’t make an appearance at the county’s meeting. But others did and the sentiment was the same.
“I’m retired on a fixed income, and a lot my neighbors are in the same situation,” said Huson resident Jerry Christensen. “I know people who are having to forgo medication to pay taxes. I never hear anything about cuts. I don’t get a 4.8 percent increase in my retirement every year.”