County budget holds the line on most property taxes

A budget approved by Flathead County commissioners last week is set to decrease county tax bills for many property owners.

It’s a change from what officials predicted in June, when a draft budget backed by commissioners estimated an increase in property taxes to support long-term projects. But increases in home values and growth, combined with the county’s frugal planning, alleviated some of the burden on taxpayers, said County Administrator Pete Melnick at the Aug. 27 meeting. 

Property tax rates will decrease by $1.14 per $100,000 of assessed value for many homeowners, according to county officials.  

“Savings are modest but, as any good farmer will tell you, a little rain still counts,” Melnick said. 

However, Commissioner Pamela Holmquist noted a caveat. Taxes on primary residences are taxed at a different rate than second homes and short-term rentals under changes enacted by the state Legislature.  

This means some tax bills will see an increase, depending on the property, she noted. It’s up to the Montana Department of Revenue to assess properties and apply the tax rates. 

“Many of them may see quite an increase,” Holmquist said.  

The budget calls for $153.58 million in total revenue for fiscal year 2027 and lists $209.91 million in expenditures. While it appears the budget overspends by about $56 million, officials said these numbers don’t tell the entire story.  

The county deposited $95 million last fiscal year from selling voter-approved bonds in April. About $47.5 million of the proceeds will be spent this fiscal year to construct the new Flathead County Public Safety Facility in South Kalispell.  

“In other words, the funding came through the front door last year and will go out the construction door this year,” Melnick said.  

Construction of a new 110,000-square-foot county jail at 225 Snowline Lane is underway as the result of the $95 million bond approved by voters last November.  

Thanks to a recent boost in the county’s credit rating, the tax increase to pay off the bonds is lower than expected. Over the next 20 years, annual property taxes will go up by $9.98 per $100,000 of assessed value to pay the bond, down from the $11.13 predicted last fall. 

This year’s tax levy also dropped slightly as mill values increased.  

The new budget levies 101.12 mills, down from last year’s 102.62 mills, as mill values increased by nearly 20%, to $667,426. 

The tax levy is set to generate approximately $64 million in property tax revenue — an increase of roughly $10.4 million over the last fiscal year. New property entering the tax base contributed $917,855 of this increase, Melnick said, and another $1.39 million is attributable to inflation.  

Commissioners also levied an additional 5.47 mills for the first time in five years, which generates about $3.65 million of the increase. Another $4.42 million comes from voter-approved mill levy changes, including the jail bond that passed last November. 

“There are no mystery rabbits coming out of the hat here,” Melnick said. “The dollars have names and addresses.” 

The upcoming fiscal year budget of $209.91 million is an increase over the last fiscal year’s budget of $142.1 million.  

Costs for capital improvement projects are approximately $67.9 million, an increase of $46.85 million over last year’s spending, according to figures provided by the county.  

Large projects budgeted this year include building the public safety facility and reconstructing the 118-year-old covered grandstands at the county fairgrounds. The county has also invested in road and bridge maintenance, solid waste management, public health, libraries, planning, elections and emergency services.  

The county’s workforce of roughly 574 employees will receive a 2.15% cost-of-living adjustment this year, at a total cost of about $818,000.  

There’s $23.24 million in county cash reserves, which accounts for 24.3% of tax-levied funds and is well within the statutory cap of 33%. This is a slight decrease from last year’s reserve of 27%.  

Report for America Reporter Hannah Shields can be reached at 406-758-4439 or [email protected]. If you value local journalism, pledge your support at dailyinterlake.com/support.