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Item 3.
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| City Council Work Session | |
| Date: | 05/05/2025 |
| Title: | Property Tax Legislation and Budget Impact |
| Presented by: | Andy Zoeller, Finance Director |
| Department: | Finance |
| Presentation: | Yes |
| Legal Review: | Not Applicable |
| Project Number: | N/A |
RECOMMENDATION
2025 Montana State Legislation, specifically Senate Bill 542 and House Bill 231 (assumed to be signed by the Governor), will reduce the City of Billings' property tax base. This necessitates City Council direction on developing the FY26 budget. Staff will provide information on the impacts of these bills on Billings.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
See attached memo
ALTERNATIVES
Staff is seeking Council direction specific to this property tax legislation, and needs this direction in order to prepare the FY26 budget.
FISCAL EFFECTS
The preliminary FY26 budget was built based upon an assumption of a 4% increase in property tax revenue over FY25. This amounts to about $2.3 million in new property tax revenue. With this legislation, the preliminary budget needs to be reduced by $2.3 million to remain revenue neutral from FY25 to FY26. Depending upon which direction City Council chooses regarding the number of mills to be levied, the budget may need to be reduced an additional $8.6 million dollars.