MISSOULA — While the state hasn't released this year's appraisal values, Missoula County is looking to hold any tax increase in the new fiscal year under the rate of inflation, or less than 3.4%.
Officials on Thursday released the county's base budget, one that only included expenses and not incoming revenue. The latter will be detailed once the state submits the latest taxable values or the amount of new revenue the county may receive from new development.
The proposed $80.4 million budget represents a 3% increase over last year.
“We're going to work to hold any increase people see in their tax bill under the rate of inflation. We're going to be under that number again this year,” said county CAO Chris Lounsbury.
Of the major expense categories, the county expects a decrease in all but one, that being the cost of personnel.
Last year, the county worked to fill dozens of vacancies at the detention center, the sheriff's department and the county attorney's office, among other departments. Those new hires are driving a $4 million increase, or roughly 8.6%, in personnel costs in the new budget.
But other categories including operations, debt service, capital improvements and capital outlay, will all see a decrease ranging from 5.3% to 41%. When combined with the increase in personnel, the base budget is expected to decrease by $10.8 million, or roughly 7.7%.
“We've got a $10 million decrease in our budget. But the declines are all concentrated in our one-time expense category,” said county CFO Andrew Czorny. “We have the ongoing increase of about $3 million, for which we'll have to find funding or revenue, or further cuts to the budget.”
While one-time expenses are generally covered by the county through savings, ongoing expenses often require new revenue. While that can be found through grants, it may also come through tax increases or by levying new mills.
This year's requests for ongoing budget items range from $231,000 for Crime Victim Advocates to $118,000 for the county's grants department.
“We've been very successful in getting grants over the years,” said Lounsbury. “Excluding our Public Works grants, we've been averaging between $11 million to $12 million in grants they've been managing to bring in. But it does require staff to be able to track and accurately report on those grants.”
Lounsbury said the county will also need to find revenue to cover other cost increases, including a 5% increase in medical costs. That increase is largely driven by pharmacy increases, and it may require the county to levy additional mills to generate the necessary revenue.
Shoring up the sheriff's retirement fund may also require more mills, Lounsbury said. But even so, this isn't a reappraisal year, so the state's tax increases won't come into play. Many residents were left with sticker shock last year when the state's appraisal values soared.
“What folks saw was a significant shift in their property taxes, due to centrally assessed and other tax categories paying less due to appeals and how they were valued,” Lounsbury said. “We don't anticipate that happening to that scale this year because it's a non-reappraisal year. We're working with the Legislature and the governor to come up with a solution to bring forward to ensure those tax shifts don't happen again in the future.”
The state's new tax taxable values are expected on Monday, the county said. Missoula Mayor Andrea Davis on Monday is also expected to unveil her executive budget for the new fiscal year.
The county's base budget presented on Thursday only includes expenses. The revenue picture will take shape next week once those new values come in.
“Those newly taxable values, those new properties that will come onto the market and come into the certified taxable values, are not yet included on the revenue side,” Lounsbury said. “We are not looking at a $3 million across-the-board property tax increase.”
Lounsbury added that the county doesn't plan to increase its assessments to the county's Rural Special Improvement Districts this year. That's true also of the historic downtown federal building, now known as the Engen Local Government Center.
More information and comments on the FY 25 budget can be found here.
