As Montana’s taxable values have continued to change over the last few years, small cities have felt the impact, leaving them with a less reliable basis for projecting their next budget.

The changes led to cuts in the City of Polson’s last year’s budget, and with 2026 taxable values changing, Polson created a ‘conservative’ budget. 

However, after Polson received the final numbers on Aug. 3, Finance Officer Jodi O’Sullivan said they were “definitely a lot better” than she and Interim City Manager George Simpson had anticipated as the worst-case scenario. Yet the final numbers still left Polson in its fourth consecutive year of a budget shortfall.

“It's good for the taxpayers, okay for the city at this point because we got all that extra value,” O’Sullivan said during one of the budget hearings. “If we didn't experience growth, we might be having a different conversation.” 

The Polson City Commission held two public hearings and its regular meeting on Monday, Aug. 17, to discuss and approve the $11 million budget. The meeting also included adopting the general mill levy, permissive medical levy and municipal services levy. 

The general mill levy will generate nearly $2 million, the permissive medical levy will bring in over $200,000, and the municipal services levy will provide more than $300,000. O’Sullivan said this represents an $80,000 increase over last year's general fund numbers. 

While taxpayers are paying less, the city is receiving more money, she added.

Budgeted expenditures for this year total $12.3 million, but O’Sullivan said the cash reserves will help cover the difference. Some of these expenditures include capital improvement projects at the Polson Bay Golf Course and within the Water and Sewer Department, along with a project at Riverside Park. 

Simpson explained in a later interview with the Leader that the commission's top priorities were funding water infrastructure, street infrastructure and a code enforcement officer. Within this budget, they were able to fund a code enforcement officer. 

This budget includes an additional patrol vehicle for the Polson Police Department, which was omitted from last year’s budget. This will allow the department to resume its regular replacement schedule. 

“We are in a healthier fiscal position than we were last year,” stated Simpson in a press release. “That is not because we are assuming that revenues will continue to grow or that there won’t be challenges ahead. It is because we approached this budget conservatively and were able to use less of our reserves than we have in previous years.”

The commission unanimously approved the fiscal year 2026-2027 budget and the levies. 

O’Sullivan also presented the resolution to levy and assess special improvement districts and special maintenance districts, which includes the residential and commercial lighting districts. Combined, those districts total about $42,000, which will be added to the 2026 property tax bill. 

The commission also approved this special district resolution.

Mayor Laura Dever thanked city staff for their hard work on this budget and noted that the commission will be more involved in the budget process going forward.