Tax Fight Breaks Out Over School Funding for Montana Counties

The battle over Montana property tax rates is entering a new phase, with state and county officials at odds over the "mill rate", or the amount of taxes the state will charge property owners to provide uniform school funding.

And local leaders are expressing alarm over the state's insistence on the mill rate, saying it will add millions of dollars to property tax bills at a time when communities can least afford it.

The dispute has been simmering since the end of the Legislative session, with the state moving to collect the traditional 95-mills that are used to balance funding support for schools in all 56 counties.

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But county commissioners are alarmed, arguing the state has the option to reduce the mill rate to 77.89this year, providing tax relief. Missoula County commissioners are already drafting a resolution, with the Helena Independent reporting the Montana Department of Administration has filed a suit to block the move.

Dispute crossing party lines

Even in GOP strongholds like Ravalli County, the imbalance is upsetting for local leaders.

"Statewide, that's approximately 79 more million dollars. Just in Ravalli County, it's almost two and a half million dollars," explains Ravalli County Commissioner Jeff Burrows. "And with all the discussion about inflated property taxes this year we just think it's responsible for them to levy the calculated 77.9 mills."

RELATED: Missoula says property taxes at the breaking point

Burrows says in the past, counties had been generally content with the higher mill rate.

"But we've never seen property taxes spike as much as they had in one year like this. So usually the 95 mills levied from the previous year would only result in a pretty miniscule increase to your property taxes. But when you see appraised values go up 30, 40, 50 percent that 95 mills all of a sudden equates to a whole bunch of money."

An issue over jurisdiction

The state argues the Department of Revenue doesn't have the authority to adjust the mill rate. But the counties see otherwise.

"This will not impact school budgets," Burrows stresses. "This will impact the state general fund and where is this differential statewide of almost $78 million going to come from."

Ravalli County Commissioners expect a big turnout when they discuss the issue Tuesday afternoon at 1:30 in Hamilton.