City officials in Great Falls unveiled a $183 million draft budget for the city’s 2027 finances on Tuesday. This marks an essential phase for city commissioners, who must finalize the budget within a month. The Montana Department of Revenue’s updated property values guide cities on available tax revenue from homes and businesses. However, recent legislative changes have introduced uncertainties in property tax structures.
“We actually pushed the budget process back so we could see what the Department of Revenue would provide us,” said Greg Doyon, Great Falls City Manager, highlighting the challenges due to legislative changes from last year.
Great Falls intends to tap further into general fund reserves to address ongoing budget deficits. However, Doyon cautioned that this approach is unsustainable long-term. Opportunities for public input will be available in the coming month.
New legislation has delayed budget planning
The city faces delays in estimating tax revenues due to revamped property tax regulations. Senate Bill 117 altered how property taxes could be adjusted for inflation without voter approval and changed revenue collection from new properties. This bill, effective only recently, affects city revenue calculations.
Jennifer Olson from the Montana League of Cities and Towns noted, “SB 117, frankly, just went into effect on July 1,” emphasizing the significant impact on local government planning. Two additional bills from 2025 have also modified residential tax structures, including a phased “second-home tax” affecting the 2027 fiscal year.
The new taxable revenue, calculated by the state revenue department, is anticipated to be hundreds of thousands of dollars. However, due to capped values, officials worry about potential reductions.
Notable developments won’t translate into tax revenue for years
Great Falls is set for economic growth with new development projects. However, tax revenue from these developments won’t impact the budget immediately due to a delay before new projects appear on tax rolls. Finance Director Melissa Kinzler emphasized this lag time during Tuesday’s meeting.
City officials have launched a “strategic capital investment fund” to support infrastructure, funded via increased utility assessments approved in 2025 after contentious public discussions.
City will dig deeper into reserves as COVID aid runs dry
With federal COVID aid depleting, Great Falls must rely more on its general fund reserves. The reserve, once at $13.5 million, now stands at $9.2 million. Doyon proposed using $632,000 from reserves for the 2027 budget, representing a break from the city’s savings target.
The general fund, impacted by subsidizing local government projects and a failed 2023 public safety levy, is under strain. A multi-year tax protest from Calumet also reduced reserve funds. The budget proposal includes leveraging inflationary and medical levy increases, possibly raising a $600,000 home’s annual tax by $61.21.
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