County to Collect Supplemental Property Taxes Following Court Ruling on 95 Mills
Flathead County property owners who paid their entire property tax bill in the fall will receive a supplemental bill in May; those who only paid the first bi-annual installment will see the supplemental charge tacked onto their spring bill.
By Denali Sagner
Flathead County property owners will see an additional charge on their tax bill this May after the state of Montana mandated the county collect the full amount of a contested school equalization tax.
The Flathead County Board of Commissioners on Jan. 24 voted unanimously to amend the amount collected of a statewide school equalization tax for the 2023 fiscal year, returning the amount the county collects to the annual standard of 95 mills.
Municipalities in Montana set property tax rates based on “mills.” Each mill is $1 per $1,000 of taxable value.
The commissioners in October voted to reduce the tax amount to 77.9 mills after an unprecedented spike in property values drove an increase in taxes. The county was forced to reverse course and collect the full 95 mills following a November Montana Supreme Court ruling stating that Montana’s 56 counties must collect the full tax amount per a directive by the state.
“It’s a bookkeeping nightmare for the taxpayers,” commissioner Brad Abell said at the Jan. 24 meeting. “We tried to save them some money on this and the Supreme Court ruled against us, and now we’re going to have people with fees and interest rates and penalties on top of it, and they’re still going to be upset.”
According to Flathead County Treasurer Adele Krantz, if taxpayers paid both installments of their property taxes in the fall, they will receive a supplemental bill in May with the additional amount of the school equalization levy not previously collected. If they only paid the first installment of their property taxes, the supplemental levy amount will be tacked onto their spring bill.
“We’re going to do our best to make it so it’s not so confusing, but it is confusing. It’s going to be very confusing for people and they’re not going to be happy campers,” Krantz said.
Last week’s vote by the commissioners marked the latest development in a drawn-out battle between the state of Montana and its 56 counties who, over the course of fall and winter, have sparred over how much property owners should be required to pay in the wake of ballooning property values.
After an influx of new residents flocked to Montana during the pandemic, fundamentally reshaping its housing market, the median residential property value in the state rose by 46% between 2021 and 2023. The median residential property value increased by 45% in Flathead County; 54% in Glacier County; 59% in Lincoln County; and 44% in Lake County.
Due to the statewide spike in property values, the state’s school equalization levy, which distributes educational funds between tax base-rich and tax base-poor school districts, is set to bring in an additional $99 million in revenue for the 2024 fiscal year. Approximately $15.3 million of the $99 million will come from Flathead County, making it the second-highest contributor to the state’s school equalization levy, after Gallatin County.
Citing concerns over rising tax bills, 49 of Montana’s 56 counties this fall collected 77.9 mills, rejecting an order from the Department of Revenue and the Gov. Greg Gianforte administration to collect 95 mills in spite of rising property values. The Supreme Court in November ruled against the counties, stating that the Department of Revenue’s interpretation of its taxation authority and the school equalization levy was “consistent with the Montana Constitution and the Legislature’s directive to equalize funds for public education across Montana.”
In a Jan. 25 press release, a spokesperson for the county emphasized that “the local county employees and Department of Revenue employees did not play a role in this decision and the work they do is centered on complying with laws passed by the Legislature.”
“Flathead County is not raising property taxes. Residents will pay the amount originally due under 95 mills, with the balance being added to the second payment due in May,” the press release stated.
Krantz said the county will be sending out approximately 60,000 notices. The second property tax installment is due May 31.