MISSOULA — A portion of the city's tax increment collected for economic development will instead go to fund the county's share of the Johnson Street shelter in the new fiscal year.
Missoula County commissioners on Tuesday voted 3-0 to use its share of the Missoula Redevelopment Agency's remittance of tax increment to fund roughly $910,000 in shelter costs over the next year — roughly half of the shelter's $1.8 million operational budget.
The city has yet to finalize the remittance but will likely do so in the coming weeks. If approved, it won't increase taxes this year.
“We were asked to participate in funding the Johnson Street shelter again this year. It has grown to operate year-round,” said county CAO Chris Lounsbury. “There is not a way for the county to contribute this year outside the tax increment the city is considering. We don't have ARPA funds remaining that can fund that.”
Facing a budgetary crisis, the city in each of the past few years hasdipped into the tax incrementheld by the Missoula Redevelopment Agency and its various urban renewal districts.
The funding is intended to fuel redevelopment and economic growth, along with housing and infrastructure projects.
Under law, whenever the city seeks a remittance, it must split the funding equally between itself, the county and the school district. Since the tax increment was generated inside city limits, county officials said it was fair to using the funding to aid the city in its shelter operation.
“Those taxes are collected inside the city, so staff felt this was an appropriate mechanism since it's largely funding assistance for what's primarily a city service,” said Lounsbury.
The city on Monday levied 2 emergency mills to help fund its share of shelter costs, pledging that doing so would only happen one time.
While the county can also levy emergency mills, asking all county residents to fund a city shelter would be a stretch, officials said.
On Tuesday, the county also approved several one-time expenditures for its FY25 budget, which will be adopted in early September.
The expenses don't impact the amount of property taxes the county needs for basic operations, officials said.
The one-time expenses range from $40,000 for strategic planning to $55,000 to conduct salary surveys ahead of union negotiations, among several dozen other things.
“They don't have a property tax impact,” Lounsbury said of the one-time expenses. “They're from either savings the county has set aside, grant funds or other means, where we're using cash the county has on hand to fund these.”
The county's final budget presentation is planned for Sept. 5. The city adopted its FY25 budgeton Monday night.
