Missoula, MT (KGVO-AM News) - At a Missoula City Council meeting on Wednesday, Interim Mayor Jordan Hess explained why taxes on Missoulians will have to rise nearly 10 percent this year, after a 12 percent increase last year.

Mayor Hess referenced the difference between the residential property tax and other taxes, such as business.

Mayor Hess Explains the Reasons for Tax Increases

“We have a 35 percent increase in residential taxable value from 2022 to 2023, and a 7 percent decrease in centrally assessed taxes, and again, such as your Verizons, your Northwestern Energies, your Charter Spectrums,” said Hess. “While not providing commentary on any of those individually, that's the tax class that is going down while residences are going up. And that’s a policy issue that we might want to take up with the Montana State Legislature.”

Hess again compared the dependence of city services on residential property taxes, as opposed to business equipment and other taxes.

“The valuation increases on residential properties this year is significant and this has made an impact year over year,” he said. “You know, contrast that with business equipment and centrally assessed taxes where the portion of our funding that comes from those types of tax classes continues to decrease. Those are policy decisions that our state legislature has made, and those are policy decisions that have had impacts on what residents pay.”

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Hess said all City Expenses are Rising, so Taxes Must Also Rise to Cover Them

Hess said city services and other expenses are rapidly increasing and must be addressed through increased residential property taxes.

“Anecdotally, within the city, as we've mentioned, we've seen a 52 percent increase in fire department calls for service. We've seen 89 percent more dwelling units permitted in 2022 than in 2019, which of course takes general fund staff to do in our community planning, development, and innovation department. We've seen the cost per foot of a water main, increased 66 percent since 2021.”

Hess Referenced Dramatic Price Increases Facing City Government

Hess again referenced dramatic increases facing the Missoula city government that necessitates the resulting property tax increases.

“The cost of a fire truck has gone up 53 percent since 2020,” he said. “These are million-dollar assets and they're highly critical assets that we need to have in a state of good repair that are available to deploy at a moment's notice. They're getting more expensive. This cost of living is really a proxy for wage inflation, so since 2020 there has been a 13.7 percent increase in the average cost of living in the Western region, and this goes to show that the labor forces that we're seeing require us to raise wages in order to maintain a competitive hiring environment.”

The late Mayor John Engen explained that there were no tax increases during the COVID pandemic years, so the city has had to raise taxes to catch up since then

Click here to watch the Wednesday Missoula City Council meeting, which included several budget amendment requests by city council members.

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