Park County

Background on Property Taxes

Every 2 years, the Department of Revenue conducts a statewide assessment of the market value of property.  The market values seen on the 2023 tax bill are based on assessments performed in January 2022.  According to the Montana Code Annotated (MCA), market value is “the value at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.”  The taxable value of a property is determined by multiplying the assessed market value of a property by the assigned tax rate.  The residential property tax rate is 1.35%.  The agricultural rate is 2.16%.  The commercial rate is 1.89%.

Assessed Market Value X Tax Rate = Taxable Value

Gardiner Residential Property Example

$600,000 (Market Value) X 1.35% (Residential Tax Rate) = $8,100 (Taxable Value)

Taxable Value X Number of Mills / 1000 = Levied Taxes

$8,100 (Taxable Value) X 291.05 (Number of Mills) / 1000 = $2,357.05 (Levied Taxes)

Levied Taxes + Assessments = Tax Billed

$2,357.05 (Levied Taxes) + $227 (Refuse Assessment) + $7 (Soil & Water Assessment) = $2,591.05 (Tax Billed)

Property taxes are highly individualized.  The dollar amount you contribute to a specific tax component is determined by a combination of levies and assessments. Property type, location within Park County, and whether the property is within city or town limits are factors that influence which levies appear on your tax bill.   A tax bill contains levies for schools, the County, the State, and applicable municipality (City of Livingston or Town of Clyde Park).  Levies are applied against taxable values.  Assessments are flat fees assigned for a service.  The County refuse fee is an example of an assessment.

Why is the County budget in the red, despite the increase in property taxes?

The Department of Revenue provides the County with the total taxable value of property located within each jurisdiction.  The total taxable value of property in Park County is $91,664,988, up 37% from last year.  The value of a mill in Park County is $91,665. Even though the taxable value goes up 37%, County revenue does not increase by 37%.  County revenue growth is restricted by floating levies. The portion of the County budget supported by floating levies can grow at half the rate of inflation over a 3-year period, or 2.46% in 2023, plus any taxable value from new construction (MCA 15-10-420).  There is an inverse relationship between floating levies and taxable value. When taxable values go up, floating levies go down. Voted levies do not have the same restriction because they have been approved by voters. 

According to a study conducted by Montana State University’s Local Government Center, the impact of the floating levy is a 27.7 percent reduction in growth.  Click here to view the calculations.

The 3 types of Park County levies

According to Park County Finance Director Erica Stickland:

 “There are multiple factors impacting residential tax revenues. Taxes do typically rise, but last year’s taxes went up significantly more than the county float factor of 5%-6%. The Health Insurance permissive levy increased due to increasing health insurance rates and the fixed voted mills increased in accordance with the percentage increase of each individual taxable value for each property. What’s of much more concern is that the residential % of total taxable value increased to a bigger piece of taxable value that contributes to overall taxes. The information below shows that residential values rose 48% while commercial values rose 36%. That puts more of the burden on the residential property owner.”

School, city, and state levies can increase your overall tax bill, irrespective of county tax structure. 

What is the impact of new construction on the County’s property tax revenue?

Finance Director Strickland:

“Tax revenues increase with new construction. New construction comes in from the Department of Revenue as a separate item. Mills are calculated based on last year’s tax revenue dollars plus the inflation factor dollars. After that, those newly calculated mills are applied to the new construction taxable value, and the new construction revenues are added to the last year’s revenues plus inflation dollars. Each year is different depending on construction and market value of construction.”

What factors contributed to the current situation?

Finance Director Strickland:

“The biggest impact is the answer to the prior question in terms of a disproportionate burden on residential taxpayers. Other contributors are the state legislation system set up in the early 2000’s. Fixed mill votes are rarely reduced to account for large increases in taxable value, although MCA code allows for a reduction of mills from the voted (you can go less, but you can’t go over). The average last 3 years of inflation does not help the county keep up with demands, and yet the property taxpayers keep getting increases that are not all based on county operations.”

Who is involved?

The State Legislature

The Legislature determines tax rates and exemptions. The Legislature assigns a tax rate to each of the 16 property tax classes. Tax rates range from .29% to 15.12%.  The most common tax rates are residential, commercial, agricultural, and forest.  The Legislature has also set limitations on property taxation (MCA  15-10-401).

The State

The Department of Revenue’s Property Assessment Division provides the classification and valuation for properties.  The Property Assessment Division then determines a property’s taxable value by multiplying the market value by the tax rate. 

The County

The Department of Revenue provides the County with the total taxable value of property located within each jurisdiction.  The County uses the total taxable value to determine how many mills are needed for the budget.

The County Commission has decision making authority regarding the County budget.  Commission meetings are open to the public.  Members of the public have the option to attend in-person, online, or by phone.  During each meeting, there are opportunities for public comment.  Upcoming meetings, agendas, and past meeting recordings are available at this link.

Updates and upcoming decisions

During the April 9th County Commission discussion on the allocation of PILT (Payments in Lieu of Taxes), Commissioners voted in favor of cutting $200,000 from the Road Department and $200,000 from Public Safety.  The preliminary budget discussions for FY2025 are underway.  The preliminary budget will be made available to the public this summer.  For a timeline of the budget review process, please see the April edition of the newsletter. 

The County received $380,406.56 in Title 1 funding from the Secure Rural Schools program.  According to their website, the program provides counties across the U.S. and Puerto Rico with critical funding for schools, roads, and other services.  Park County’s funds are distributed between schools ($126,802.19) and roads ($253,604.37).  This year’s payment was subjected to a 5.7% sequestration reduction of $22,993.82. To learn more about the program, visit the website at https://www.fs.usda.gov/working-with-us/secure-rural-schools .

For more information

Public meetings

Click here to access meetings online and locate dial-in information.

Click here to view upcoming meetings, past meeting recordings, and agendas.

Resources

Click here to view the FY 2024 Final Budget Document.

Click here to visit the Accounting Department page.

Click here to view the Park County Property Tax Presentation.

Click here to view the Local Government Center’s study on the impact of floating levies.