With frustration, Missoula City Council approves FY 25 budget

Martin Kidston

(Missoula Current) Missoula Mayor Andrea Davis on Monday said “inflation and priorities” continue to outpace the city's ability to generate new revenue, creating a structural imbalance that will require an ongoing evaluation of services and new revenue tools.

Others said the state's tax system was fundamentally broken and has shifted the cost of essential services squarely onto property owners while industry and corporations enjoy deep tax cuts and the state overlooks other revenue sources, including Montana's vast tourism industry.

While that debate will likely find it's way to the Legislature next year – and while nearly all expressed some level of frustration with the budget – the Missoula City Council on Monday night approved next year's funding on an 8-4 vote.

The new budget includes a 5.8% tax increase. When the fire levy is added, it brings this year's city tax increase to 11% - not including any increases brought by the county, schools or the state.

The council also approved levying 2 emergency mills to fund the Johnson Street shelter. But Davis said it doesn't add to the city's 5.8% base tax increase and will be levied for “just one year.”

As adopted, the city's total budget is set to increase by roughly $13.1 million, growing from $203.6 million to $216.7 million. Davis said that includes increases to all taxing districts managed by the city, enterprise funds and other things the city has little control over.

“The budget has been and is an ongoing challenge for the City of Missoula,” Davis said. “We have a limiting factor with the way our primary revenue source – property taxes – are limited to one-half the rate of inflation.”

Heavy lift with budgetary challenges

In this her first budget year, Davis said she worked to shift to a priority-based budget. The City Council over the past week voted down all but one amendment to the budget – including various attempts to either cut or increase taxes. The only amendment that passed doesn't have a financial impact on the new budget.

The emergency homeless levy needed to pass with a unanimous vote, and it did. It also prompted prolonged debate.

“For the budgeting priorities to work, we'd either need to pass this one-time levy or we'd need to roll it into the final numbers of mills we'd need to levy,” said council member Amber Sherrill. “We're working as a body and a community to mitigate the effects of those living unsheltered in our community, and for those living in our community who are housed.”

The threat of burying the cost of sheltering the homeless into the general fund as opposed to levying the emergency mills one time cornered the council's two fiscal conservatives, forcing Sandra Vasecka and Bob Campbell to vote for the emergency levy.

“I need to choose between the lesser of two bad choices,” said Vasecka. “This is a vote between a permanent increase or a temporary increase, and funding the Johnson Street shelter was supposed to be temporary. I'm always skeptical when government says temporary or one time.”

The new budget's cost to taxpayers including the general fund, increases to the road and park district and the fire levy, amounts to roughly $321 annually for a home with an assessed value of $450,000.

The city also increased various fees by as much as 7%, including those associated with business licensing. But even there, debate followed.

“It seems like never-ending fee increases,” said council member Daniel Carlino. “The never-ending fee increases are affecting building, camps and sports. We should at least have a plan to level them out in the future.”

The fee increases passed on an 8-4 vote. Council member Bob Campbell described it as a “cautionary tale” of the city's involvement in enterprise ventures, including the cost of running pools and Marshall Mountain, among other things.

Those should be left to the private sector, he suggested.

“Maybe we should stop to think of what the long-term ramifications are going to be and the cost of that for maintenance, upkeep, the personnel,” he said.

But others suggested that when costs go up, fees go up, even in the private sector. The last few years served as case in point, they said. Even the state ran up its appraised values of properties, some by more than 40%.

That has had a deep impact on taxpayers.

“Most of the user fees for these things were voter approved,” said council member Mike Nugent. “Both our pools were voter approved. Fort Missoula was voter approved. The Open Space Bond was voter approved. This is us as council trying to be responsible in sharing the cost with users on something voters directed us to do.”

Those who opposed the budget included Sandra Vasecka, Bob Campbell, Daniel Carlino and Kristen Jordan. Those in favor included Amber Sherrill, Gwen Jones, Jennifer Savage, Stacie Anderson, Mirtha Becerra, Sierra Farmer, Mike Nugent and Eric Melson.

Comments from most City Council members can be found here.