Montana counties setting property tax mill levies

HELENA — Montana property owners’ taxable values are one key part of the property tax picture in the state, but another important factor is the mill levies set by local governments. Counties across Montana are finalizing those mill levies ahead of a deadline next week.

By Monday, Sept. 11, all counties will have to report to the Montana Department of Revenue how many mills they will charge on this year’s property tax bills. In many cases, that number may be going down, in a partial counterweight to the significant increase this year in property’s taxable values.

While counties are responsible for calculating and assessing property taxes, the rates they submit to the state include not only their own mills, but also those charged by cities and towns, school districts, fire districts and other special districts. The actual amount of property taxes charged is the taxable value multiplied by the total mill rates from all the governmental jurisdictions a property is in. Each mill is $1 per $1,000 of taxable value.

The state generally charges property owners 101 mills – 95 to equalize funding among Montana school districts and 6 to support the Montana University System. However, other jurisdictions vary their rates year to year.

When the total taxable value in an area increases, that means a local government can raise more money from one mill – so they are able to assess fewer mills on each property and bring in the same amount of revenue. State law says local jurisdictions can assess enough mills to bring in the same amount of property tax revenue as the previous year, plus half the average rate of inflation over the last three years, plus any newly taxable property. Voter-approved levies don’t count toward that cap.

In Lewis and Clark County, the county commission finalized their mill rates at a meeting Thursday morning.

“Having a good staff that puts things together and makes it as easy to understand as possible is important, and having a staff that’s willing to live within budget constraints is important,” said Commissioner Tom Rolfe. “They’ve done a good job of that.”

This year, the inflation factor counties could add is just under 2.5%. Frank Cornwell, Lewis and Clark County’s chief financial officer, said the county’s revenues from mill levies will increase by about 5.3% this year, and by 4.5% if voted levies are excluded.

Because the county’s taxable values increased roughly 30% in this year’s reassessment – more than the increase in revenue – the county decreased its mills from 198.56 to 162.36 for properties in the cities of Helena and East Helena, and from 235.25 to 191.49 in unincorporated areas – where the county assesses additional levies for roads and planning.

Rolfe said county leaders understand the concerns people have about property tax increases, and they’ve tried to be responsible with their budgeting.

“We’ve tried to absorb some of those high inflationary costs by being a little more cautious in the things that we’re buying, maybe stretching out capital purchases a little bit longer and whatnot – trying to keep the impact to the taxpayer down,” he said.

Because of the complex interaction of municipal, school district and special district boundaries, it is complicated to compare tax rates across various locations within the county. For a resident within the city limits of Helena, the total number of mills will decrease from 804.14 last year to 706.49 this year. In East Helena, it will decrease from 864.67 to 712.54. In unincorporated areas, the rates are much more variable.

You can find a link to a full list of Lewis and Clark County mill levies for the 2023-2024 tax year on the commissioner’s agenda.

Rolfe says commissioners and county budget staff want to be open about the mill levy process.

“We encourage people to come by and bring their questions,” he said. “We’ll try to answer them.”