Martin Kidston

(Missoula Current) After a lengthy presentation on how property taxes in Montana have shifted from businesses to residential, Missoula County on Thursday adopted its FY24 budget.

The new budget includes a 5.4% increase in taxable value, or about $3.6 million. But given this year's significant jump in the state's assessed value of homes, county officials said they weren't able to translate into a precise dollar amount what each home will pay in additional county taxes.

“This year because of reappraisal and the shift that's happening, it's different for every single home in Missoula County, based on how much the value of that home changed,” said county CAO Chris Lounsbury. “There is no one universal number because the shift is so great this year.”

During this year's reappraisal process, the Montana Department of Revenue increased the assessed value of homes in Missoula County by an average of 37%.

County officials said local residents would have seen a tax decrease this year if not for the increased value of homes. The Legislature's failure to lower the residential tax rate from 1.35% to .94%, as recommended by DOR, also played a role.

“It's not lost on me the burden that residential property taxes and the shift in burden from other classifications in property to residential is causing,” said Commissioner Dave Strohmaier. “The root cause of this shift in tax burden falls squarely in the lap of the Legislature and saddles residential property taxpayers with a significant increase that otherwise would be shared across other tax classifications.”

As the state has lowered taxes on other classifications, such as utilities and telecommunications, among others, it has simply transferred those taxes to residential property owners, the county said.

“They all had their taxes lowered and shifted onto residential owners,” said county CFO Andrew Czorny. “Reductions in business property taxes, reductions in centrally assessed properties, reductions for NorthWestern Energy, all these things are now being placed on the residential homeowner.”

This year's county budget comes on the heels of the City of Missoula's new budget, which also increased taxes by 9.7%. Other taxing jurisdictions could also add to the increase, including the state's so-called 95 mills. If not offset due to new appraisal values, the state's portion of one property's taxes could increase by as much as 37%.

That has led Missoula and Beaverhead counties, among others, to ask the Attorney General's Office for an opinion on state mills. Along with the Montana Association of Counties, the counties believe a provision in Montana law requires the state to reduce mills when taxable values increase.

“There are certain pieces of the budget that are in our control and certain pieces that are not,” said Lounsbury. “The tasks performed by county government are dictated by state statute. We don't have a choice but to provide the services we provide.”

This year, the county denied roughly $1.8 million in new spending and $1.1 million in additional personnel requests. However, it also approved new one-time requests along with ongoing requests supported by taxes.

Lounsbury said the bulk of this year's budget focuses on the county's workforce. The county has and continues to face staffing shortages in critical areas, including the Sheriff's Department, and is working to make its pay more competitive.

Nearly 85% of county workers are covered by collective bargaining agreements, Lounsbury added.

“We work really hard with our collective bargaining partners to make sure we're able to meet the needs of our staff and our non-union staff,” said Lounsbury. “Many of the increases this year are directly related to that need to retain a workforce.”