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Reality Check

The Price We Pay for Government Theft

Ironically, the City of Billings' hubris bill will be paid for by the victims of the theft: the city taxpayers

By Tammi Fisher

It’s a felony crime to steal from the government. But what happens when the government steals from you? Consider what happened in Billings. In 1980, the City of Billings decided to prohibit property tax increases above 74 mills absent voter approval. Not surprisingly, since 1980, the City of Billings has tried to escape this prohibition. On three separate occasions, the Montana Supreme Court had to order the City of Billings to stop stealing from its taxpayers when the city chose to implement “fees” in an attempt to get around the 1980 prohibition on tax increases. But Billings didn’t stop its antics.

In 1992, the city implemented a “franchise fee” of 4% on water, wastewater, and garbage disposal rates. The fees have never been attached to any franchise because Billings doesn’t have any franchises. As evidence of this fact, the fees were never deposited to a utility account; instead, the fees were dropped into the general fund, which is supposed to be solely supported by property tax revenue. As early as 2004, the public complained at city council meetings about the illegal fees. The city knew what it was doing wasn’t legal, but it wasn’t until 2018, when another lawsuit was filed, that the city stopped collecting. By then, it had collected over $75 million in these “franchise fees” unrelated to any franchise and collected in violation of the city’s charter. 

So, did the city initiate a refund to its taxpayers once it was sued in 2018? Nope. Instead, it set on a course to fight the litigation, engage in unnecessary delays and trips to the Montana Supreme Court, and seek to justify its unjustified pillaging of its taxpayers. 

Instead of settling the claims by the taxpayers for $20,000 at the outset of the litigation, the city rejected the offer and proceeded with its vigorous defense of the indefensible. It spent over $600,000 in attorney fees because the taxpayers asked that the lawsuit be turned into a class action so the interests of all Billings taxpayers could be represented. So this $20,000 claim, for which the city of Billings has no insurance coverage, turned into a $75 million claim. Ironically, the city’s hubris bill will be paid for by the victims of the theft: the city taxpayers. 

Billings had managers and attorneys who could have stopped the franchise fee faux pas but chose not to. Why? Because they have no consequences for failing to act. The only check on local government is us. And if we don’t watch carefully, the government will rob us blind.

Tammi Fisher is an attorney, former mayor of Kalispell and host of Montana Values Podcast.