Lincoln County’s $2 Million Mistake

By Beacon Staff

LIBBY – Lincoln County’s budget woes have gone from bad to worse. County Commissioner Tony Berget said “huge” cuts are in store for the county after a mathematical error was discovered that revealed it had taken more than $2.1 million in additional taxes over three years.

More than 75 people attended a press conference hosted in Libby on Feb. 7 where the commissioners explained how the mistake was made and how it will be corrected in the coming months.

“We’re here and we’re not running from this,” Berget said during the meeting. “There is no doubt about it that this is a complete and total error.”

Lincoln County is already cutting its shoestring budget. In January, the county commissioners voted to cut two elected positions – a justice of the peace and the school superintendent. Berget told the Beacon after the meeting that more cuts would be made in the coming months and that the county is looking at only offering services that are mandated by law, including road plowing and law enforcement.

According to county officials, the mathematical mistake was discovered late last year, when someone noticed that the county had allowed 56.86 mills to be levied for the Troy Area Dispatch; according to county documents only 31.91 mills were supposed to be levied. The Troy Area Dispatch organizes law enforcement, medical and fires services in Troy.

The mills are supposed to rise with inflation, but upon further inspection, the county realized the taxes were inflating above and beyond that level. During the 2010–2011 fiscal year, dispatch received $8,526.36 more than it should have; in 2011–2012 it received $43,213 too much; in 2012–2013, $111,278.10; and in 2013–2014, $216,915.30, for a grand total of $379,932.76 over four years. Additional mathematical mistakes were found in how the Troy Parks District and the Lincoln County Campus District received funding. In all, Lincoln County over-taxed its citizens by $2,112,597.25, according to preliminary and unverified figures offered by the county. County officials say that number could change in the coming weeks.

L. Harold Blattie, executive director of the Montana Association of Counties, has advised Lincoln County on how to correct the mistake since it was first discovered. He said the mathematical error happened sometime around 2009 when the county clerk and recorder was calculating tax data that would determine how many mills could be levied in each district. Instead of entering the gross proceeds money received from the Troy Mine, the clerk entered the taxable value of that money and that mistake resulted in the mill levies exceeding their limits. Blattie called it a “simple and honest mistake.”

Clerk and Recorder Tammy Lauer spoke at the packed meeting at Libby City Hall and took responsibility for the mistake.

“I have been physically sick over this … This is my mistake and my responsibility,” Lauer said. “I feel awful that this happened and I’ve tried to figure out how to go back in time and fix it, but I can’t. I can only move forward.”

County officials stressed that the numbers offered on Feb. 7 were still preliminary and had not been verified by an independent auditor. Berget said that while Lincoln County is audited every year, the review runs roughly a year and a half behind. In other words, the two years with the largest mistakes have yet to be fully reviewed. Officials said the preliminary numbers were offered in an effort to be transparent.

Once the actual amount of overtaxed money is determined, the county will start reducing taxes to make up the difference over time.

“We want to get this money back to the taxpayers as soon as possible,” Berget said.

Friday’s meeting went on for nearly two hours and many in attendance were frustrated with the situation. At one point, a man said, “This is our money and we want it back!”

Among those in attendance was Troy Mayor Darren Coldwell. Two of the districts that received the additional taxes were in Troy and Coldwell said it’s important that the mistakes are fixed and that the money is redistributed.

The fact that Lincoln County will have to return more than $2 million in tax money could not come at a worse time. Even before the mistake was found, the county commission was making deep cuts to a budget that averages about $15 million annually. There’s been a drop in the Secure Rural Schools funds the county receives. SRS funds are doled out to places like Lincoln County where the federal government owns most of the land and there are not enough property taxes to balance the budget. In Lincoln County, most SRS funds go toward the road budget. During the 2010–2011 fiscal year, the county road budget was $5,191,991 and included $3,250,541 from the SRS program. Three years later, the road budget was $3,874,329 and included $2,734,913 from SRS funds.

“There will be huge impacts (on services)” Berget said. “We’re probably going to get down to doing just the mandated services.”

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