With a new fiscal year and budget for the City of Great Falls right around the corner, FY24 starts July 1, 2023, I thought it would be a good idea to present a brief refresher on local budget realities.
The Great Falls City Commission is very limited by state law when it comes to raising taxes at the local level and in my opinion this is a good thing. But it does present challenges when it comes to funding city services every year.
There are only three ways the city commission can raise local tax revenue for the general fund:
- The inflationary factor on property tax, which is a rate of half of the three year average rate of inflation, so it’s variable depending on the Consumer Price Index generated rate of inflation. By way of example, for FY22 the factor was 0.93 percent, or $157,843 total additional revenue.
The city commission voted unanimously to NOT utilize the inflationary factor in both 2020 and 2021 due to COVID’s financial impact on Great Falls citizens and businesses.
- Permissive medical levy to fund rising health insurance costs for City employees. In 2022 it was a 1.43% local property tax increase.
And again, the city commission voted unanimously to NOT use this tax in 2020 and 2021 due to COVID.
- A local option tax on recreational adult use marijuana sales countywide – 45% of the 3% tax collected by the County will be distributed by formula to the incorporated towns within Cascade County. I confirmed with City fiscal that the current estimate for Great Falls would be about $240,000 per year. This is a brand new revenue source and we have yet to see how it plays out going forward.
What About Fees and Permits
Generally speaking, the other revenue categories fall under special assessments – like Portage Meadows, boulevard districts, Park Maintenance District 1, etc., and enterprise funds that rely on fees, permits, and licenses.
For instance the Planning and Community Development Department funds itself, for the most part, through building permits, safety inspections etc.
An example of city services being paid for by fees would be your garbage collection rates or your water/sewer rates.
Not-So-Obvious Impacts of Inflation
When you go to the store and a dozen eggs costs three times more than it did a year ago you understand the direct impact of inflation.
When you turn on your water faucet or take out your trash for City pick up the impact of inflation may not be as obvious, but it’s still there because the rising cost of EVERYTHING hits EVERYONE EVERYWHERE – even the City of Great Falls and it’s services and operations.
So the City has two choices, either raise the fees for services to cover rising costs or reduce the level of City services.
Time For Citizens to Weigh In
Each and every time the Great Falls City Commission deliberates on raising fees or taxes there is a fully transparent vetting process and ample opportunity for public input.
Allow me to close with a couple of observations.
First, I’m looking forward to hearing from local taxpayers during the upcoming City budget discussions. If we need to cut services or City expenditures in order to balance our budget and still provide the level of service citizens demand then please be specific and factual with your suggestions. I’m listening.
Finally, in 2020 and 2021 I voted with my fellow commissioners against any tax raises or fee increases. I would like to be able to vote that same way every budget year so that Phyllis and I, and all of our fellow Great Fallsians, would never have to see our local taxes and fees go up while keeping the same level of City services, but unfortunately that isn’t reality and we all know it.