Whitefish City Manager Dana Smith presented budget updates at last week’s City Council work session after receiving new tax assessments from the state.

The value on newly taxable property came in at $1,699,000 and Smith had estimated the new value would be $1,620,000 for the preliminary budget. 

She reported the taxable value for the city went up 28.5% for the past two years. 

“The 28.5% increase is due to the two-year reappraisal cycle, newly taxable property of $1.7 million, and the change in the property tax rate structure adopted during the 2025 Montana legislative session,” said Smith. 

Additionally, two bills passed the Legislature -- Senate Bill 542 and House Bill 231 - work together “confusingly,” Smith said.  

“The challenge with this bill is that currently under 2024 tax year ... it was a very simple flat rate, 1.35% on residential property values,” Smith said. “Now you have a graduated scale based on your value. That’s the first year. The second year they add even more complexities.” 

She said a home valued at less than $400,000 will have a tax rate of 0.76%. Homes valued between $400,000 and $1.5 million will have a tax rate of 1.1%. Homes with a value greater than $1.5 million will see the tax rate go from 1.89% to 2.2%. 

As an example, the city portion of the property taxes for a home with the 1.1% tax rate would go down about $36 for the year. 

Smith added that it is important for homeowners to watch for a notice from the governor about a property tax rebate. 

“You do have the option for a $400 property tax rebate,” she said. “That's an important thing to apply for because that will automatically put you on the list for the next year to classify you as a primary resident.” 

THE COUNCIL supported getting the city’s nonunion employees’ pay to 95% of market rate. 

“The level of service and the professionalism that our city staff provides to our city is unmatched and certainly appreciated by this council as well as everyone that I speak to in town,” said Mayor John Muhlfeld. “I see no reason why we can't bring nonunion to 95% of market.” 

The council also gave direction to Smith regarding funding for three nonprofit organizations. 

The Whitefish Community Center was granted $15,000 this year and the council agreed to give an additional $5,000 to Big Mountain Commercial Association, the group that runs the S.N.O.W. Bus, bringing its funding to $20,000. 

Project Whitefish Kids, the nonprofit that tends Smith Fields, will receive $100,000 annually. 

“I want to preface what I'm going to say with an observation that the city's finances are pleasantly very strong,” said Councilor Ben Davis. “I think providing some funding toward Project Whitefish Kids is a high value use of taxpayer funds.” 

Whitefish Finance Director Laine Gospodarek presented a multi-year outlook for the city’s capital improvements. 

“You will notice that the CIP document looks a little different this year,” Gospodarek said. “We have provided a general five-year overview by department which identifies funding sources.” 

She said, while it is necessary to fund capital improvements for water and wastewater utilities, there are no planned rate increases for fiscal year 2026. 

“However, the South Water Storage and Production project may require future increases to cover the debt service that will be associated with this project,” she added.