If Scott Turner's projections are correct, tax protests in Yellowstone County will approach $44 million by mid-2013.
That's causing heartburn for Turner, the county's finance director, and his counterparts in other local government bodies.
Turner presented a spreadsheet Tuesday morning to county commissioners and finance directors from area school districts and the city of Billings.
"There are big numbers across the board here," Turner said.
Turner added up all of the big tax protests the county is facing right now, as well as the expected tax protest next year from the ExxonMobil refinery.
If ExxonMobil protests its taxes as expected, all three of the oil refineries in the county will have taxes under protest. The other major tax protests are from Bresnan Communications, Alltel Wireless and Verizon. Most of the major tax protesters have received tax incentives from the city or county.
By the end of this fiscal year on June 30, the county will be holding about $18.6 million in protested taxes. If the tax protests remain unresolved for the next few years, which Turner said is a possibility given their complexity, the total will grow to $31 million in June 2012 and $44 million in June 2013.
The companies are protesting a portion of their property tax bills, which are calculated by the state Department of Revenue. But when tax money is under protest, it's hard for local agencies to get at it for their operational costs, and local agencies rely heavily on property taxes to pay employees and fund daily operations. In some cases, school districts can request a portion of the protested taxes, but if the protest prevails, the school district would have to pay back any protested money it received.
In 2009, the CHS Refinery in Laurel protested $3.6 million of its $6.5 million tax bill. Because of a quirk in state law, the Laurel School District couldn't receive any of the protested money until late this year, when it requested just more than $1 million. If CHS ultimately wins all of its protest, the district would have to pay back the protested money that it borrowed, either through budget cuts or through an increased mill levy. And because CHS is the biggest taxpayer in the district, it would wind up paying for much of any tax increase levied by the school district.
Turner said some of the protests could be resolved before 2013, but he and others are warning local agencies to be cautious in spending money that might have to be paid back.
"I'd be very careful about taking (money)," county Treasurer Max Lenington said. "If I was a school district, I wouldn't take it unless it's a dire situation."
Commissioner Bill Kennedy said the county would be very careful in its upcoming budget, because the county's portion of protested taxes is more than $3 million, or about 8 percent of the county's annual tax levy.
"This could go on for a number of years," he said. "The budget hearings this year are going to be very critical."