Yellowstone County Courthouse

The Yellowstone County Courthouse is seen.

Every year, Montana cities, counties, school districts and other local government entities wait for the state Department of Revenue to notify them of property tax valuations. The 2019 wait just ended.

Under state law, local governments depend on property taxes because the state prohibits them from imposing other types of taxes. Public K-12 schools, counties, cities, fire, water and hospital districts rely on property tax revenues to deliver public services citizens want.

The Montana DOR is required to determine a market value for real estate and taxable personal property and then calculate the fraction of market value that equals "taxable value." For many years, Yellowstone County has had the highest market value, as determined by Montana DOR. But this year, DOR found that Gallatin County has the highest market value ($22.7 billion) with Yellowstone County second at $21.6 billion, including $13.2 billion of market value in the city of Billings. Flathead is the third highest value county at $18.8 billion.

From that $21.6 billion in market value, the DOR calculated that Yellowstone County has a taxable value of $391 million, including $13.5 million in "newly taxable value." When new property value is added to the tax base the tax burden is spread out, so if nothing else changed, everyone would pay a little less in taxes. 

In fact, lots of things change. Voters may approve new levies, such as the $970,000 operating levy Billings authorized in May for School District 2 high schools and the $49.9 million school bond issue that Lockwood voters approved last year.

Montana law requires the DOR to reappraise real property every two years. Property that appreciates in value more than the average may have higher taxes even when the local tax base grows or when overall market values drop.

Conversely, property that DOR determines to have lost market value may pay less in taxes even though other property in the city has increased in value.

The result of the state tax law, the latest DOR calculation, voter decisions and elected officials' (e.g. school trustees, county commissioners and city council members) decisions will slight lower levies for the average taxpayer in Yellowstone County, Billings and School District 2.

Tax bases for Billings’ elementary and high school districts each increased almost 5% in value for this year, the Gazette's Matt Hoffman previously reported. The school levy will decrease by about 2.8 mills for property in the K-12 district, according to the district's chief financial officer. Property in the high school only district will have an increase of 1.8 mills while the elementary levy decreases 3.9 mills.

Montana law mandates school districts to levy at least enough revenue for to meet a state minimum spending requirement and also limits each district's maximum annual operating budget.

Taxable value increased 4.3% for the city of Billings, which resulted in small mill levy decreases for bond debt service on Dehler Park, Billings Public Library, street and parks bonds. Those bond payments are the same amount of dollars regardless of taxable value, so higher value spreads the payment burden voters approved years ago.

Yellowstone County, the city of Billings and Billings Public Schools all will have slightly lower levies on the November tax bills. But individual property owners' bills will vary depending on whether the property is in other taxing jurisdictions that increased levies and whether the property value increased more or less than the average in the tax district.

Don't assume your taxes are going up. The Yellowstone County Treasurer's Office plans to mail tax statements the last week of October. Take a close look to see what factors caused your bill to go up or down for the year. Remember: The first half of property taxes is due Nov. 30, the second half by May 31.

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