Missoula County: Finding solutions to Montana’s outdated tax system

Missoula County Board of Commissioners

Missoula County residents are feeling the property tax pinch, as the recent failure of the crisis services levy and fairgrounds bond demonstrates. If it weren’t for current economic forces, we have no doubt our community-minded residents would have supported them.

But we understand. Residents’ property taxes have climbed unsustainably over the past few years. Some folks continue to perpetuate the misconception that local government spending is solely at fault for this, when the real issue is Montana’s antiquated tax system.

Claims that simply blame higher property taxes on increased spending don’t tell the entire story. Local governments fund some services outside property tax collections, so it’s inaccurate to equate all spending increases to increases in property taxes. For example, in Missoula County, Partnership Health Center accounted for $44 million, or 21%, of this year’s budget. PHC provides essential healthcare services to thousands of residents and is funded by fees. It receives zero property tax dollars.

While local governments don’t rely solely on property taxes, they remain the major source of revenue available to fund essential services, and the only major tax we can legally collect. Despite this limitation, Missoula County has gotten scrappy over the past few years, constantly looking for ways to uncover new revenue. This includes the gas tax voters approved in 2020, which the Legislature swiftly repealed. To replace that revenue, we're putting some funds from the voter-approved marijuana tax toward ensuring county roads are repaired, maintained and plowed.

We also leave no stone unturned when securing grants and other funding. Staff successfully apply for and manage around $30 million in grants a year. In addition, we're exploring using impact fees to pay for increased services in areas experiencing growth so taxpayers at-large don’t absorb those costs.

While we'll keep pursuing ways to fund government that don’t further burden homeowners and renters, our options are limited. Montana’s tax system is outdated, as local government can no longer rely on tax revenue from lumber mills and other industries with large property footprints. Our economy has shifted, and with it the tax burden, which now unfairly falls to the people who live here. It’s time for the Legislature to change that.

What about asking tourists to pay their fair share for the services they use, such as roads, wastewater and emergency response? Missoula County alone sees 3.5 million outside visitors a year, yet state law prevents us from harnessing revenue from them. A modest local tax on items and services most frequently purchased by tourists could generate millions of dollars to put back in the pockets of our residents – if the Legislature would authorize us to pursue such an option.

Missoula County is doing our part to find solutions so folks aren’t taxed out of their homes. To provide meaningful relief without cutting essential services though, we need state policymakers to think outside the box as well.

Signed: Missoula County Commissioners Juanita Vero, Dave Strohmaier and Josh Slotnick