Dick Barrett
There were two points in your story today about the proposed city budget and its impact on property taxes that were quite confusing, and which I think Current readers could benefit from having clarified.

1. You state in the first paragraph that the city budget “includes $6.3 million in new revenue, bringing the city’s total tax-supported revenue to $111 million - up from $105 million last year.”

That appears to be a 6% increase in city property tax revenue. Why then is the increase in city taxes for property owners reported to be 9.7%? Particularly when you take into account the fact that $1.2 million of the $6.3 million come from new property, implying that the remaining $5.1 million comes from increased taxes on existing property.

If taxes on existing property were $105 million last year, and increase by $5.1 million this year, that apparently means that property owners are going to pay 4.8% more than they did last year, not 9.7%. What’s the  source of this discrepancy in your (or perhaps the city’s) numbers?

2. You report that the mayor noted that although 9.7% is still a significant increase, it is a lot less than the average residential increase of 37% calculated by the Department of Revenue on the reappraisal forms it sent out to homeowners this year.

The problem, as we know, was that DOR failed to take into account the fact that mills would go down. But the decline in mills is not going to bring the residential tax increase down to 9.7% as the mayor seems to be suggesting (as I say, I have no idea where that 9.7% comes from). You say that total city mills are going down by 40, or 12.6%. If the taxable value of residential property has risen 37% (that’s the county figure; the city figure may be different) and total mills have gone down 12.6%, total city residential taxes will rise by19.7% [.37 - .126 - (.37 x.126) = .197].

That’s an average across all residential properties, of course. Taxes on some residences will not go up that mc, bt taxes on other residences will go up more than that.

The important point is that taxes on residential property (which are really what the public is most concerned about) are going to go up more than taxes on all property (be that 9.7% or 6% or 5% or whatever) meaning that taxes on residential property are going to go up a lot more than taxes on non-residential property.

Taxes are shifting from non-residential to residential. That’s because residential property increased in appraised value a lot more that non-residential did, and the legislature did nothing to mitigate the impact of reappraisal on taxable value.

That stands in stark contrast to what the legislature did in 2009, the last time there was a big run up in residential appraised values. The 2009 legislature appointed a special select joint committee on property tax reappraisal mitigation to deal with the issue. The 2023 legislature ignored it.

More From Missoula Current