How are Property Taxes Determined?
There are 3 main types of levies allowed
in Montana. The type of levy defines how many mills can be charged
annually.
2.
Permissive Mills –
Annual Mills allowed by Montana state
law to be levied for specific purposes to raise needed funds (Permissive
medical levy and some school levies, for example). In the
2017 legislative year, the state created or allowed a higher level of
permissive levies for the schools to allow for more local control. This
has had a large impact on everyone regardless of changes in taxable value, and
that is expected to continue.
In addition, there are assessments
charged for living in a particular district or for services such as Refuse.
The Montana Department of Revenue
contains information about property taxes in Montana. The following links
provide detailed information, and the Certification of Values information is
repeated here for the “Non-Voted or Floating Mill Calculation”.
************************************************************************************************************************
Floating Mill Calculation for Non-Voted Levies
Certification of
Values – Example of
Floating Mill Calculation (Floating for Inflation and new property)
Every year, the Property Assessment Division
provides the total taxable value of property to each taxing jurisdiction by the
first Monday in August. The certified values include all classes of property
within the boundaries of a taxing jurisdiction. These values are very important
because the jurisdictions use them to calculate the amount of mills they can
levy.
The formula for calculating mills involves
increasing the prior year’s budget by one-half of the inflation from the
previous three years. This is the new budget used to calculate the amount of
mills. In order to find the number of mills needed, the new budget is divided
by the current year’s certified taxable value and the result is multiplied by
1,000. If, for example, the prior year’s budget for a jurisdiction was $1
million, the previous three year’s inflation was 2% and the current year’s
taxable value was $2 million, the calculation without newly taxable would be:
( ( 1,000,000 * ( 1 + ( .5 * .02 ) ) ) /
2,000,000 ) * 1,000 = 505 Maximum Mills
When we insert the newly taxable value into
the formula, it will be subtracted from the current year’s taxable value. If
the $2 million of taxable value included $100,000 of newly taxable value, the
new maximum amount of mills would be:
( ( 1,000,000 * ( 1 + ( .5 * .02
) ) ) / ( 2,000,000 – 100,000) ) * 1,000 = 531 Maximum Mills
The jurisdiction is now allowed to levy a
maximum of 531 mills against the property within its boundaries.
The amount of annual taxes paid on property is
equal to the taxable value of the property multiplied by the cumulative mills from
all taxing jurisdictions in which the property resides.
Property Tax = Taxable Value x
Jurisdiction Millage Rates
Capped Revenues = ($2,000,000/1,000)*531
Mills = $1,062,000
In Fiscal Year 2018, the Montana Department of
Revenue Taxable Values for Park County increased 10%. Park County’s 3%
increase for the County Wide mill does not follow the taxable value totals
because it is restricted by inflation and newly taxable property entering the
tax rolls. The allowable inflation factor is .82% for FY2019, one half of
the average previous three year’s inflation based on CPI.
Park County Wide Revenues Cap Formula Example: See Park County FY2019
Budget Page 198
Using
the Fiscal Year 2018 Tax Revenue figure of $3,689,014, Park County is limited
to raising $3,846,455 in Fiscal Year 2019, or a 4% increase for the County Wide
Levy (.82% inflation plus newly taxable property).
***Other non-voted levies are calculated in a similar manner***
To see the Park County list of Levies and Assessments in Park
County, see Park County FY2019
Budget Page 192 to 193