City budget tax increase comes with caveats

By CHRIS PETERSON

Hungry Horse News

The Columbia Falls City Council approved the final 2024-25 budget last week and former city manager Susan Nicosia clarified a few things for taxpayers.

Yes, she noted the taxes for homeowners are expected to rise, but, she also noted they went down significantly the year before.

Nicosia is working under contract on the city’s budget this year.

Under the $5.097 million general fund budget, homeowners with an assessed value of $100,000 would see a tax increase of $52.64; a $300,000 home an increase of $156.41; and a $600,000 home an increase of $312.82.

The tax increase comes after the cost of a myriad of city services went up and the total tax rebate from the city’s resort tax went down over last year.

Even so, a homeowner’s tax bill could very well could be lower or close to what it was in 2022.

The Hungry Horse News looked at a home assessed for $539,000 in 2023 as an example.

That home had a city tax bill of $1,185 in 2021, a city tax bill of $1,103 in 2022 and a city tax bill of $869 in 2023.

The reason for the drop was in 2022 it was the first year of the resort tax rebate, which meant the home received a rebate of about $76.

That rebate increased considerably in 2023 because the city’s resort tax not only brought in about $1.5 million, the city also had underestimated what it thought the 3% tax would raise.

Under the law, the city must apply 25% of the resort tax to property tax relief.

But in addition, if the city estimates lower earnings from the resort tax and they actually come in higher, then the difference must also be applied to property tax relief under the law.

So last year the city had about $800,000 in resort tax to apply to city property tax relief.

As a result, that $539,000 home saw a rebate of $513.50 in 2023.

But this year, the city adjusted its resort tax estimate to $1.5 million and the actual amount came $87,000 short of that estimate.

As such, the rebate for property tax this year isn’t as much, about $371,785.

That $523,000 home this year will see a rebate of about $220.

The formula works like this: $539,000 assessed value x 1.35% tax rate = $7,276.50 taxable value x 30.36 mills/1,000 = $220.91 rebate.

You can figure out your rebate by inserting the amount of assessed value of your home or property into the formula.

So yes, while taxes will go up this year, your actual city tax bill should still be close to or less than what it was in 2022. It will vary from home to home depending on one’s assessed value.

The resort tax did a lot of good, city officials note. It helped pay for an additional police officer -- the city now has 11 officers and a chief. It also pays for three paid firefighters plus the chief.

In addition, there is more money for streets in this year’s budget as well. None of that would have been possible without the resort tax.

“Without the resort tax we wouldn’t have 11 officers and a paid fire department,” Mayor Don Barnhart said. “Our resort tax is so valuable.”

But he also cautioned the council that the resort tax is tied to the tourist economy and a recession could certainly have impacts.

“We have to be careful to not get too reliant,” he cautioned.