Even with city tax reduction, property taxes go up for many

While Columbia Falls city property taxes will go down for residential properties this budget cycle, folks could still see increases in their overall property taxes when bills are sent out in the next few weeks, city manager Susan Nicosia told council last week.

Nicosia used several different anonymous properties to show council examples of tax bills.

For folks inside the city, they’ll see a city property tax rebate because the city’s 3% resort tax brought in more than estimated. Under the law, any amount that is over the estimate has to be applied to property tax relief. The city estimated that the resort tax would bring in about $780,000. It actually brought in about $1.5 million.

But this year also saw a big surge in property values from a state reappraisal. On the whole, city residential property rose 51% on average, while commercial rose 59%. In Flathead County as a whole, the average was a 45% increase in valuation, while commercial went up 60% from the last appraisal.

Municipalities, in turn, lowered the number of mills, but as often the case, that didn’t offset the increase from appraisals.

As such, some homes will still see an overall increase in property taxes, Nicosia noted. It just won’t be from city property taxes.

For example, a home with an assessed value of $307,400 last year, now has an assessed value of $439,700 — an increase of 43%.

Its mills went down by 211 overall, but the total tax bill is projected to go up by $102.30, or 3%.

Another example home saw a more modest increase. That home went from an assessed value of $300,900 to $430,600 — a 39% increase, but will see a tax increase of just 0.41%, or $13.34. Its city taxes will see a drop from $757.35 to $525.60, a decrease of $232.08.

The city rebate helps keep the tax bill on that home flat.

But other properties will see much bigger jumps. One property with a 56% increase in taxable value is still projected to see a hefty jump in its tax bill of about $510, from $4,362 to $4,872. That’s a 11.67% increase, even though its city taxes went down $211.

In other words, the properties with higher changes in assessed value will also likely see higher property taxes overall, city rebate or not.

A commercial piece of property, for example, saw a $62% increase in assessed value.

It’s taxed at a higher rate — 1.89%. (Residential homes are taxed at 1.35%) Its taxes are expected to jump $1,427.55, or about 14% this year, even though its city taxes are expected to drop just under $400.

There could be one more tax rebate in the wings, however. Counties are challenging the 95 mills that have been collected as part of property tax bills for education under the state’s school equalization program, which balances funding between schools with higher tax bases with districts with lower tax bases.

The richer counties, in short, are arguing that with the higher appraisals, levying the full 95 mills violates state law on how fast government tax collections can grow.

The case is being heard in Missoula County district court, with Gov. Greg Gianforte’s office and school advocates defending the mill levy, while the counties are opposed, claiming there’s plenty of money in the state’s general fund to bridge the gap.