Neighbors,
Montana’s recent changes to property taxation are reshaping what homeowners see on their tax bills: FY26 moved from a flat 1.35% residential rate to a graduated structure, and FY27 introduces a Homestead Exemption with primary residences and long‑term rentals remaining on a graduated structure, while second homes and short‑term rentals are taxed at a flat 1.9%.
For Whitefish, prudence matters. The City has relied on carry‑forward mills, a financial shock absorber, to avoid sudden tax spikes. Recognizing real risk that the Legislature may eliminate this cushion, the Council chose on a 4-3 vote, to use more mills now. We moved from 27.82 carry‑forward mills at the end of FY26 to 11.59 at the end of FY27. This decision is about stability, not spending for spending’s sake. This decision also helps us avoid leaning on reserves for day‑to‑day operations and fund planned capital improvements instead of using reserves or deferring projects to future years.
What does this mean for a typical primary residence? Based on the mill levy and assessments needed to balance the budget, a $1,000,000 home will see less than a 6.6% increase in the City portion of the tax bill, which totals about $53 a year, or $4.42 a month. Impacts are higher for second homes and short‑term rentals because the State’s FY27 rules tax those properties at a flat 1.9%. That’s a State‑driven shift, not a local change.
Zooming out, trend lines have remained modest over the last eight years, with the average property‑tax bill for a $1 million residence rising 5.1%, while the City’s share averaged just 2.5%. Voter‑approved resort tax relief continues to help, with 25% of collections offsetting property taxes; for FY27 that credit totals $2,439,028, equivalent to a 20.1‑mill reduction citywide.
On spending, our approach is disciplined and practical. The City is responsibly levying mills, stopping the use of reserves for ongoing operations, and cash‑funding more capital. This year’s priorities include long‑planned park and street work and critical public‑safety equipment like the Quick Attack Fire Pumper. Even amid shifting State rules, Whitefish’s FY27 budget maintains and improves services, invests in infrastructure wisely, and protects long‑term sustainability.
John Muhlfeld is the mayor of the city of Whitefish.