Martin Kidston

(Missoula Current) With the Legislature set to convene next week for the 2023 session, the City of Missoula and the region's team of delegates are gearing up for what they see as potential opportunities around housing and tax reform, and potential setbacks around constitutional meddling.

Missoula's delegation is comprised largely of Democrats, and they'll be working in the minority in both the House and Senate. They crafted a list of priorities they hope to pursue and defend, and many of them align with the city's own goals.

“A lot of us have individual priorities we're working on," said Rep. Marilyn Marler, D-Missoula. "But the priority of your Missoula democratic delegation to the Legislature is to protect the Montana Constitution, and to use the state's $2 billion surplus in a way that helps Montana families.”

Gov. Greg Gianforte's proposal for the budget surplus could include $1 billion in income and property tax cuts. Some could be used to create a child tax credit, spur housing development, and invest in healthcare and correctional facilities.

Marler said most Democrats want to invest a portion of the state's budget surplus to create workforce housing, expand childcare opportunities, and address mental health care.

“We'd also like to see some of that used for property-tax relief for income-qualified Montanans,” Marler said. “There's a long way to go on those negotiations.”

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Many of the local delegation's goals align with a list of priorities created by the city – a list Mayor Jordan Hess described as “fairly straightforward.” The list includes just six topics, but the impact of each runs deep and has room for improvement.

Property tax reform tops the list, Hess said.

“We are in an untenable property-tax situation,” Hess said. “Our property-tax burden continues to rise as our property tax burdens continue to rise. That really is our top priority.”

A report from an interim revenue committee in Helena found that 97% of the revenue relied upon by local government comes from property taxes. That's far more than other states, the report found, suggesting the average was around 71%.

The lopsided equation has left Missoula and other Montana municipalities in a pinch, Hess said, as they struggle to pay for the rising cost of goods, services and labor, with property owners as their only source of funding.

Hess said the state's current property-tax system remains based on an economy that no longer exists in Montana. It fails to consider new and emerging economic realities, such as tourism.

“We are almost exclusively reliant on property taxes as local governments in Montana,” Hess said. “We'd love to see a local option tourist tax, something that's targeted on tourism-oriented items. We would also support any local-option tax that provides meaningful property tax relief.”

Housing and other issues

Housing is also a leading issue – one that Missoula has been working acutely to address for several years. That effort is beginning to pay off, though city officials admit there's vast room for improvement.

The city last month kicked off an effort to reform its codes and regulations to streamline building and offer incentives for affordable housing and preferred development.

At the same time, Gianforte's Housing Task Force will offer its only recommendations to the Legislature. The two could align in some areas and clash in others.

“We will very strongly support housing programs that help us deal with our housing problems,” Hess said. “We agree with the governor's Housing Task Force that regulatory reform alone won't get us out of this problem. We'd support regulatory reforms that improve local government efficiencies and allow us to chart our own path forward.”

Missoula Mayor Jordan Hess. (Martin Kidston/Missoula Current file)
Missoula Mayor Jordan Hess. (Martin Kidston/Missoula Current file)

Other city priorities include protecting Tax Increment Financing and aligning it with the state's new definition of workforce housing. Renewable energy also is included, as the city looks to tap into the resources offered by the recent bipartisan infrastructure bill from Congress.

Mental health care and crisis services also play prominently among the city's goals, Hess said. Cuts made during the 2017 session has left many communities unable to address the issue, Hess said.

“Local governments are picking up more and more of the burden of providing service,” Hess said. “We've struggled to meet the need in this area, and cities around the state are facing similar problems. We'll support efforts to provide funding in those arenas.”

Council member Gwen Jones said the city's non-profit partners are currently sheltering close to 500 people. Missoula voters in November hedged in giving the city and its partners more money to address the issue when they voted down the crisis services levy.

City and county leaders are looking for a path forward, saying the problems won't go away.

“If we don't have revenue, it's very hard to do things,” said Jones. “We're working very hard to keep people sheltered in winter months. But our ARPA dollars are running out. It's not going to get better.”