Whitefish City Manager Dana Meeker said changes were happening with the tax structure in Montana last week at a preliminary budget meeting with the City Council. The proposed total fiscal year 2027 budget is $63.5 million, which reflects a $2.8 million increase in expenditures. 

One of the biggest changes for fiscal years 2027 is tax rates for second homes versus primary homes, and commercial rates. 

A graduated tax structure began in fiscal year 2026 for all properties. The change means second homes and short-term rentals will be at a flat rate of 1.9%, higher than the tax rate for last year. 

Meeker said a lawsuit is challenging the second home tax rate and its state constitutionality. 

“In the proposed budget we assumed a 2% tax-based growth from new property,” Meeker said. “We will see that number come out the first Monday in August, so we will hold a work session again on the budget.” 

A primary residence or long-term rental valued at $800,000 will see a $31.95 increase in taxes for 2026. A second home or short-term rental property valued at $800,000 will see an increase of $567.14. 

Although resort tax collections have grown, resort tax relief to property owners is expected to be $395,501 for fiscal year 2027, a decrease from the previous year by about $128,000 when there was a one-time rebate of reserves for the Haskill Basin bond. 

According to Meeker’s report, overall capital spending in fiscal year 2027 is projected to increase about $1 million compared to fiscal year 2026. The increase is due to the Armory Park improvement project and the Grouse Mountain tennis court resurfacing project. 

The city brought non-union wages to 90% of the market rate in fiscal year 2025 and the new budget will bring those wages to 97% of market rate. Police and fire union members will see an increase in pay, bringing all union members to market rate. 

The number of property tax mills levied is expected to increase by 10.1 mills to address the increasing costs of employee wages, new personnel, capital investment, and rising operating costs. 

Included in the budget are a ladder truck, other fire apparatus and the Stumptown Ice Den roof replacement, a nearly $2 million project. Four mills are to be used directly for these projects. 

Reporter Julie Engler can be reached at 406-862-3505 or [email protected]. If you value local journalism, pledge your support at whitefishpilot.com/support.