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Delegation of Montana mayors urge Congress to cover lost local revenue

As local governments across the state grapple with lost revenue and its potential impact on local taxes and services, mayors from across Montana are urging the state’s congressional delegation to toss a lifeline and include direct financial assistance in any future coronavirus relief package.

Both city and county officials in Missoula have already expressed concern over the slow release of funds from Helena included in the first bill, known as the CARES Act. State officials have said the funding cannot be used to backfill lost revenue at the local level.

That concerns mayors from across Montana, including those who represent the state’s biggest and smallest cities. In a letter to the state’s congressional delegation, they collectively sent up a flare warning of the potential troubles that lie ahead baring any financial relief from the feds.

“If we do not stabilize our economy, we could see a precipitous drop in local government revenue,” the letter signed by 33 Montana mayors reads. “These revenues fund and sustain ongoing public safety and critical services in our local communities.”

The city of Missoula this month began drafting its preliminary budget, though revenue figures won’t be released by the state until later next month. The figures could have sweeping implications on what services are kept, what are cut and if any tax increases will be necessary.

“We won’t have a certified taxable value from the Montana Department of Revenue until the first week of August, and further reimbursements to local government through the CARES Act remain a mystery,” Mayor John Engen said earlier this month. “In light of those facts, our revenue guesses are educated and conservative.”

In their letter to the delegation, members of the Montana League of Cities and Towns cited a recent study by the Bureau of Business and Economic Research at the University of Montana, which estimated a loss of 75,000 jobs and more than $6 billion in personal income across the state.

Missoula County officials have expressed concern that some property taxes will go unpaid due to lost jobs and furloughs. By June, the county had already seen a 1% increase in tax delinquencies, which accounts to roughly $2 million in lost revenue.

“It’s not insignificant for Montana,” Andrew Czorny, the county’s chief financial officer, told Rep. Greg Gianforte. “What I’m worried about is the fall. This fall if people continue to have lost revenue in their jobs, they’re not going to pay their fall taxes and it’ll create a cash flow problem for us.”

That concern isn’t limited to Missoula and was expressed by the delegation of mayors who joined the call to include funding for lost revenue in whatever coronavirus relief bill emerges from Washington, D.C.

Without direct assistance to cover lost revenues, local governments will be forced to cut employees and reduce services, “or shift the loss of revenue onto the remaining property taxpayers.”

“Without financial support, major cuts to municipal jobs and services will hinder the ability to safely reopen the economy,” the letter states. “There is a widespread recognition that it will be impossible to stabilize the economy without direct federal fiscal assistance to our cities, towns and counties.”