MISSOULA — The Missoula City Council on Monday passed a 2025 budget increasing taxes by nearly 17%, more than half of which was approved by fire levy voters in June. Four of the 12 council members voted against the budget for different reasons, including concern over rising taxes, frustration with their ability to amend the budget and a lack of information about how city programs have performed.
The increase will add $71.31 per $100,000 of assessed value to property tax bills; owners of a $450,000 home — the median value in Missoula — will pay an additional $320.88 annually.
Mayor Andrea Davis’ first executive budget included a 5.84% increase, with bumps to the general fund, road and park districts, plus a temporary two-mill levy allowed by the June 2023 homelessness emergency declaration.
“We were really judicious in this mayor’s budget and this executive budget knowing that the voter-passed fire levy funded very important things for our community,” Davis said during the meeting. “We wanted to be very careful with what the mayor’s budget added on top of that.”
On Monday evening, the council unanimously approved the one-time levy that would raise about $414,000 to help pay for the Johnson Street emergency shelter. Missoula County will pay for half of the $1.8 million shelter cost, and the city will cover the rest of its share with remaining American Rescue Plan Act money, Davis said.
The city previously paid for the shelter using the federal pandemic relief money, which runs out next year. If the levy didn’t pass, Davis had planned to increase the general fund budget by two mills to pay for the shelter costs, instituting a permanent tax increase.
Council members Sandra Vasecka and Bob Campbell — who backed a failed proposal to defund the Johnson Street shelter during a Monday afternoon workshop — spoke against the levy although they voted for it. The emergency levy required a unanimous vote to pass.
“I’m not very happy with this decision I’m going to be making tonight because I needed to choose between the lesser of two bad choices and two that I disagree with,” Vasecka said. “I’m always skeptical when government says temporary or one time, but I do not want this to be never-ending and coming up in future budgets.”
The emergency levy is one of the limited ways the city can bring in more money as inflation and budget priorities outpace property tax revenue, Davis said. State law limits how much the city can increase property taxes, creating a “persistent structural imbalance,” she said.
“I’m not very happy with this decision I’m going to be making tonight because I needed to choose between the lesser of two bad choices and two that I disagree with.”
Missoula Council Member Sandra Vasecka
Even with Missoula’s recent growth, taxable property from new construction and annexations do not add a lot to the tax base, said Dale Bickell, chief administrative officer, during a budget workshop Aug. 7.
To help address budget challenges, Davis asked departments to inventory programs and identify a total of $1 million in savings across the city, she said. The city saved $700,000 from changing workers’ compensation providers and another $500,000 from other cuts, Davis said.
“We were seeking savings in the budget knowing we had budget increases,” she said. “Much of those are related to … our ongoing commitments in terms of staff wages and other contracts. We know those costs are going to go up.”
The city is in negotiations with the police officers’ union, which will likely result in a wage increase of more than $1 million, said Leigh Griffing, the city’s finance director.
The city’s general fund will receive a $1.3 million tax remittance from the Missoula Redevelopment Agency to help pay for core services, Davis said. The agency, which receives tax increment financing from Missoula’s urban renewal districts, will send a total of $4.5 million in proportionate amounts back to the city and other taxing districts.
The city’s operating budget is about $163 million, with total expenditures — including the Missoula Redevelopment Agency, parking commission, special improvement districts and utilities — at $216.7 million.
During the last few months, departments submitted $19.5 million in new requests, with $15.2 million funded in the mayor’s budget. That includes wage increases and other costs that are not new, like the Johnson Street shelter, but are not part of the base budget.
New costs include $4.2 million from the 34-mill fire levy approved by voters in June to hire 20 new firefighters, locate a sixth fire station, and permanently fund the mobile support team, which responds to behavioral health-related 911 calls.
The city also plans to spend $350,000 to implement its “crisis camping” ordinance restricting when and where people can camp on city property, on top of $360,000 for cleanups.
The budget also includes large projects, such as $1.8 million for renovations to the John Engen Local Government Building, $6 million to purchase 10 acres south of the Southgate Mall for redevelopment, $9.8 million for the Scott Street Ravara housing project, and $8 million in improvements to the compost facility.
The council approved a 5% increase to parks and recreation fees, a 7% increase to public works fees and a 7% increase to business licensing, engineering and land use and planning fees in 8-4 votes, with Kristen Jordan, Campbell, Vasecka and Carlino opposed.
During budget workshop meetings on Aug. 14 and Monday afternoon, the council considered 16 amendments, only one of which passed.
Council member Eric Melson’s proposal to add the railroad quiet zone capital improvement project to the city’s top-20 project list passed 8-2 with council members Stacie Anderson and Gwen Jones opposed. The project won’t get paid for in 2025, but the change directs staff to work on finding funding for it, said Jeremy Keene, public works director.
Mayor Davis said because she finalized her executive budget after department presentations, she took into account council and public input.
“We are all very conscientious of the overall property tax increase and implication to residents, and so those two things together I’m going to assume is why we didn’t see a lot of amendments passed,” she said.
Council member Daniel Carlino said while he appreciated the shift to priority-based budgeting, he voted against the budget because of a lack of council participation in the amendment process. Five members — Carlino, Jordan, Vasecka, Campbell and Melson — proposed amendments, and apart from Melson’s proposal, no amendment received more than five “yes” votes.
“I can’t in good conscience vote for these tax increases and this budget when the legislative branch didn’t do due process here and didn’t find things to cut, things to add and work for constituents in that way,” he said.
Other council members disagreed with Carlino’s characterization of the amendment process. Council President Amber Sherrill said members gave feedback to the mayor after department presentations, alleviating the need for adjustments during the amendment process. The council discussed proposed amendments at length during its last two workshop meetings, she said.
Jordan said she did not receive enough information about city programs and their performance to vote for the budget and would like to use metrics to determine funding in the future.
Vasecka and Campbell voted against the budget because of concerns about the effect of tax increases on residents, particularly those with limited income
“I cannot in good conscience vote for this particular budget given the opportunities we had at meaningful cuts, given what it’s going to mean to working families, retirees, older folks in town here that are on Social Security and have only pensions to live on,” Campbell said.
Several council members noted that state-level changes to the property tax structure are needed to help alleviate the tax burden on residents and businesses.
“It’s also important to recognize that more and more responsibilities have been placed on local governments,” Council Member Gwen Jones said. “Federal and state monies coming into our coffers are less, and yet we’re having to deal with housing and affordable housing, unsheltered folks, mental health. … So every year it gets harder, it gets more stressful, but I vote for this budget because this is how we keep our city running and working for all of us.”
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