The Billings City Council concluded its review of the proposed budget last week and is set for a final budget adoption in August.
That proposal will have $2.3 million less than first projected, a shortfall that could affect Billings parks and recreation.
“The largest impact is going to be in the parks department, about 400, $500,000 of that $2.3 million,” said Andy Zoeller, city of Billings finance director.
Zoeller says before the legislature passed the bills, the city anticipated a four percent increase in tax revenue.
“The new law says you're going to tax in such a way that you will have zero percent new tax revenue this next year,” Zoeller said.“So, relative to last year and so we had to go back and adjust the budget to reduce it by about 2.3 million.”
Because of that, the legislature's intent was to lower property taxes for Montana homeowners, and with the adjustments made in the bill, the city of Billings would collect the same amount of property tax revenue this year as last year.
“It said you will adjust the mills to the point of bringing exactly what you brought in before, no more, no less,” said Rep. Llew Jones, R-Conrad.
Jones is the House Appropriations chair and says the legislature required Billings and Sunburst to increase the mills in order to bring in the same amount of property tax revenue.
Both cities have mill caps.
“We would make sure that because they're under a charter form of government, we would, would hold them harmless and make sure they could bring in exactly what they did the year before,” Jones said. “Then thereafter it would grow normally from that point.”
The state will not help make up that $2.3 million dollar difference but would cooperate in the case of a lawsuit.
“If a local government is sued for following the new state law and it's found to have been unlawful, the state would come and backfill that lost tax revenue for four years,” Zoeller said.
Jones says the bills came about because out of state buyers led to increased property values which ended up raising residential property taxes.
“Our goal was to try to kind of rebalance the system so that residential was back aligned with with about where it was,” Jones said.
“It's really important that people who qualify go and apply and get that because that's the initial measure that they're using, to identify those properties that are eligible for these lower tax rates.”
