City gives facts of proposed budget
Whitefish government leaders work for the taxpayers. As stewards of your tax dollars, we feel compelled to provide some additional factual information on the proposed Fiscal Year 2016 budget for the City of Whitefish.
The proposed budget for the city of Whitefish totals $65,882,022, which includes all transfers and expenditures for all funds, compared to $40,437,035 in Fiscal Year 2015, a 63 percent or $25,444,987 increase.
However, of importance to city’s taxpayers is the fact that $24,479,359, or 96 percent, of the increase results from two large, one-time capital improvement projects that will have no effect on property taxes: 1) the City Hall/parking structure; and 2) the Haskill Basin conservation easement.
Without these two one-time capital projects, the overall budget percentage increase for all 25 funds would have been 2.4 percent, not 63 percent.
These two projects should come as no surprise to city residents. The City Hall/parking structure project has been contemplated since adoption of the city’s 1987 Urban Renewal Plan and has been at the forefront of public discussion for more than 12 years.
The Haskill Basin conservation easement, which will permanently protect the city’s water supply, was extensively vetted publicly for over two years, and required approval of the Whitefish voters. And it was approved by 84 percent of Whitefish voters during a special election held this past month in April.
With the exception of a proposed downtown Special Improvement District to help fund construction of the parking structure, these two projects are funded entirely by Tax Increment Financing and resort-tax funds and will not increase property taxes. It is important for city taxpayers to understand that 96 percent of the proposed budget increase will have zero effect on property taxes.
Regarding the possible property tax mill levy increase, the Montana Department of Revenue is estimating a decrease in our local tax base of 10-13 percent due to the upcoming reappraisal cycle. The city has no control over the reappraisal process conducted by the state.
Under a normal non-reappraisal year with an average tax base growth of 3.75 percent, the city’s proposed property tax increase would be approximately 4 mills, not the 22 mills proposed in the city’s budget.
What this boils down to is that in a normal year the city manager would be proposing a property tax increase of $17.26 on a home valued at $275,000 to maintain our current level of service. Because of the state’s reappraisal process, if the $275,000 house does not decrease in value from reappraisal, then the city may levy an additional $80.35 in taxes to maintain the same level of service the voters and citizens have been accustomed to and demand of city government.
The alternative solution is to cut services, but considering the city has not substantially raised mill levy tax rates since 2009, this reduction does not seem to be a viable alternative given five years of inflation that directly affects the city’s costs of providing services.
Whitefish is a complicated city, at times in appearance serving the needs of a small town with a population of 6,300 residents, but in reality serving the needs of a much large population of 20,000 during peak tourist seasons. These same visitors help drive our local economy by contributing to the city’s resort tax to the tune of $2 million a year, which funds improvements to our streets and parks, and provides an average property-tax rebate of $72 per household.
The city of Whitefish is fiscally responsible with your tax dollars. We do our best as city leaders to maintain the special qualities that make Whitefish the most desirable place to live, work and raise families. The mayor and City Council will consider all opinions as they deliberate on the Fiscal Year 2016 budget during the next three months.
Please stay engaged.
— Mayor John M. Muhlfeld and City Manager Chuck Stearns