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Billings City Council looking toward smaller levy ask in 2020

Posted at 8:10 PM, May 13, 2020

BILLINGS — Billings city staff is researching two ballot measures for the November ballot designed to fill an expected $5 million shortfall in the 2021 budget.

These two measures represent a scaled-back replacement for the levy proposal the Billings City Council had discussed for months before the COVID-19 pandemic hammered the local economy. Billings Police Chief Rich St. John and Fire Chief Bill Rash both told the Council at a Tuesday work session that they wanted to maintain their current level of service.

The city is hoping voters will allow the city to levy an additional $4 million from the public safety levy passed by Billings voters in 2004. The levy is capped to bring in a maximum of 60 mills and currently is only using 40.17 of them, which generate $8.2 million in tax revenue.

When voters passed the levy in 2004, the ballot language asked if the city could levy the dollar figure of $8.2 million, with a hard cap of 60 mills. Since property values in Billings have gone up over the 16 years since the levy passed, the overall value of a mill has not kept up with inflation. The city would ask voters whether to approve levying 60 mills, bringing the total to $12.2 million.

“In a lot of respects, that amount was already voted on by the voters. So this would be a repeal and replace, not a new. So it’s not something that we’re asking new of, but just a reset. A repeal and replace so that we’re at the current level. So that helps maintain the current level of support for police and fire," said Council Member Roy Neese, Ward 2 representative, at a Tuesday work session.

The second ask of voters may be whether so eliminate Parks District 1and put in a levy equal to its value. This budgetary shift would free up money in the in the general fund to be spent on public safety to the tune of $4 million.

If the two measures were to pass, the city would bring in $8 million, enough to cover the $5 million expected shortfall in 2020. With $3 million extra to invest in public safety, Neese said.

“So we have potential to actually do more than what just the budget gap is. Now we don’t have to approve that when it comes time. Just because we get an extra $8 million doesn’t mean we need to approve it all in the mill levy cap. But it does bring more to the city and we can increase some things," Neese said.

No final decisions were made at the work session Tuesday.

The city has been looking for a way to fix a yearly recurring $5 million deficit in the budget for over a year. About $1 million in cuts were made to the 2020 budget before its passage and the Council dipped into the city's reserves to cover the $5 million shortfall.

"Excluding capital, the City is spending close to five million dollars annually more than we generate in revenue for the General and Public Safety Funds," the Tuesday discussion agenda item states.

If both Billings measures end up on the November ballot and approved by voters, the city expects to raise about $8 million in tax revenue. This would effectively buy time for the Council to prepare another levy for 2021 or 2022 to further expand public safety services. Another plus is that the city wouldn't have to dip into reserves or make about $4 million in cuts to the 2020 budget.

The proposed 2021 city budget anticipates using $3 million from the reserves to balance if nothing is done.

The Council was aiming for public safety expansion during levy talks earlier in the year, but that was before COVID-19 and testimony from the Billings fire and police chiefs shifted the Council's appetite towards smaller revenue generators.

Both Police Chief Rich St. John and Fire Chief Bill Rash both said they would hate to lose resources if the council made cuts to the public safety budget.

“To me, the priority after this discussion tonight would most certainly be, at minimum, to maintain the services that we have, our personnel, and our ability we have to provide the services that we can provide today," Rash said.

St. John echoed the sentiment, saying if the council was going to run a 2020 levy by voters, that it be the smaller one and not one that could possibly scare voters away given the economic downturn caused by COVID-19 and the government's response.

"That is a much more palatable number. We just can’t afford to go backwards. We’re doing some pretty good work right now and I would hate to backslide," St. John said.

The council has a limited time to get ballot language to the county elections office. June 8 is the last meeting where the council could give it's approval to get something on the ballot.