Cities, counties detail funding challenges to state panel

Sep 27, 2019

Great Falls Tribune

Kelly was joined by Roundup Mayor Sandra Jones, Prairie County Commissioner Todd Devlin and Beaverhead County Commissioner Mike McGinley in front of a special panel of the state Revenue Interim Committee that is looking at House Joint Resolution 35, which is a review of state and local tax policy.

Kelly said the city needs a $500,000 addition to the police department and noted other needs as well.

“Our Civic Center is literally crumbling,” he said. “That is a $6-8 million fix, not to replace it, but to repair.”

He said the community passed a park maintenance district because it recognized there was a $12 million deficit that would never be repaired unless it took action.

Kelly said all of the tools involved going back to the same well to drain more money. He said the community would enjoy an opportunity to discuss a local option sales tax, but added the panel was directed to come with up with a “sustainable model so that we’re not constantly applying another patch or another solution to a situation we can see is not sustainable for the long term.”

“We were able to fund a million and a quarter,” Kelly said.

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In May, state lawmakers chose a study of state and local tax policy as their top priority during the 18 months before the 2021 legislative session.

HJ 35, passed in the 2019 session of the Montana Legislature, is to study state and local tax policy. The panel has been directed to establish a tax structure that works with the current economy, stabilize state revenue, reduce volatility, promote the long-term economic prosperity of the state and its residents.

The review is to be completed by Sept. 15, 2020, and reviewed by the state Legislature in 2021.

The panel, made up of House and Senate lawmakers, includes public members that include the Montana Budget and Policy Center, the Montana Association of Counties, Montana League of Cities and Towns, the Montana Taxpayers Association and Montana State University.

Prairie County Commissioner Todd Devlin said he sees cash available in county budgets is dramatically dropping from year to year.

"We are relying more and more on nontax revenue than tax revenue," he said.

Jones said Roundup is a rural community of 1,857 and has needs.

“We as well as many other cities in our state are challenged with antiquated infrastructure and are doing our best to make the necessary upgrades to make our city a safe and healthy place to live – meaning infrastructure and water projects,” she said.

She said Roundup has an operating capital of $3.4 million and that HB 124 provides 70% of the nontax revenue in General Fund.

“From a small city’s perspective you can see how we as cities and counties alike rely heavily on the state entitlement share to meet the many needs of the constituents in our communities,” Jones said. “This reimbursement that comes back to us, to local governments, is essential to help compensate for the loss of local revenue resources that we lost.”

“It is my hope that from your study you can find a way to reform or amend our tax laws in a way that would benefit all Montanans but yet not put an extra heavy heavy burden on the property and business owners in our state,” said Jones.

She said she has long favored some form of consumer tax, such as a local option, that is fair to all who come and go across state.

“I don’t know what the solution is and I pray you guys have some good answers for us,” Jones said.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.