Commissioners Plan Only Inflation Increase In Budget — No Actual Mill Increases
The budget for Yellowstone County is plagued with inflation woes, which is compounded by needs for additional staffing as well as the increased costs of obtaining and retaining staff.
The overall estimate for taxes levied for the new fiscal year budget is $62.5 million, an increase over last year’s $60 million budget.
“While Yellowstone County is in sound financial position, our preliminary fiscal year budget comes with some continued challenges, Jennifer Jones, County Director of Finance and Budget, explained to County Commissioners, last week, as they reviewed, with each county department head, their proposed budgets and needs for the coming year.
Yellowstone County is not predicting an increase to actual mills levied in FY 2024. “We have no new voter approved mills, however, property taxes will increase slightly by the statutorily allowed inflationary factor and estimated new growth rate,” said Jones.
The county’s annual review gives a broad picture of the operations of county government, as well as establishing a budget for fiscal year 2023-24, which determines the mills the county assesses. With taxpayers having recently received new property tax assessments, which were considerably higher than in years past, there has generally been great angst among taxpayers about what their tax bill will look like.
Jones said that over 90 percent of requests for additional staff came from legal, law enforcement and detention center needs.
The budget continues to focus on long-term capital needs, including MetraPark, the Miller Building, the Detention Facility and eventually the extensive remodeling of the courthouse to accommodate court-related new growth including the possibility of new judges.
Whether Yellowstone County needs to expand its jail has been an issue of considerable interest by citizens. In looking at the costs and future revenue projections, Jones explained the realities that must be faced by the county in making that decision.
“Our recently expanded detention facility is potentially scheduled for additional review as to capacity. We continue to maintain that our issues are not solely related to our detention facility being too small, but rather to some issues outside Yellowstone County’s control. Some of those issues to consider before pursuing an expansion would be the pace of the judicial system, mental health programs available in the community, and most of all the failure to address the lack of detention space at the state level which adds to our facility’s numbers. If the eventual decision is made to expand the facility again, it will be nothing like our previous expansion completed in 2020. Both a material increase in the County’s mill levy and a significant debt obligation will need approval by our voters.”
Remodeling will also be necessary for the Miller Building, which the county purchased to accommodate the county’s need for administration space. Work will begin on the Miller Building when its tenant leases expire and the county ends its lease for space in the Stillwater Building. “Currently, we are slated to begin the transition …to the newly remodeled Miller Building by the end of Fiscal Year 2025,” said Jones. “This will free up space in the Courthouse for our district and justice courts, county attorney offices and the possibility of another justice court judge. We project to be able to remodel the Miller space and remodel the courthouse with neither, any need for additional debt nor any need for a tax increase, thanks to reserves in our Capital Improvement Fund.”
COVID funds from the federal government – -The American Rescue Plan Act – has allowed the county to address infrastructure needs at MetraPark – “for which funding options were few.” Jones said, “Not only will these improvements provide the campus flexibility and responsiveness in times of community need, but it improves the campus with overall safety and functionality.” The upgrades are projected to be completed by the end of FY 2024.
In addition to the infrastructure work at Metra, the county has begun the process of bringing other improvements to Metra operations. The County has retained an industry consulting group to assist in finalizing Metra management staff, then to conduct a review and assist in the implementation of industry “best practices”, improving internal processes to increase efficiencies in operations, grow revenue streams, and reduce the County’s dependence upon mill levy support.
Jones explained that her tax revenue projections for 2024 are based upon an estimated growth factor of 2.2 percent and the State allowed increase for the rate of inflation rate of 2.46 percent.
Entitlement funds from the State, and the addition of new property tax revenue from new construction over the past year, help reduce the mills assessed to each taxpayer. Increased interest rates earned on county funds will also be higher than the “record lows” of past years, which will ease the burden. (The Entitlement fund was created by the state legislature in 2001 to compensate counties for revenues lost when the State assumed responsibility of collecting vehicle taxes. Yellowstone County’s share in FY2024 is $5,471,792.67)
Given the higher property valuations this year, the proposed county budget estimates an increase in the amount that will be protested— any revenues from which are not released to the county until the protest case is settled.
Tax revenue that comes of new growth or construction is projected to increase 2.2 percent for 2024.
The county is also allowed by the State to increase revenue 2.46 percent to accommodate for inflation.
Also included in tax revenues for 2024 is estimated marijuana tax revenue of $750,000.
Big Sky Economic Development (BSED), although a county entity, functions under a separate fund and generates separate revenues. The tax levy for BSED is estimated to generate $1,431,441 before protests. BSED will also receive about $268,665 from the State Entitlement Fund.
County Commissioners are reviewing much of the county’s salary structure “with the twin goal of attracting and retaining personnel in order to reduce overtime related to vacancies.” Salary and benefit costs included in the budget reflect estimates for union contracts currently in negotiations.
While the rise in inflation was felt last fiscal year, as well, this year many of the county’s contracted services are tied to the inflation factor resulting in significant increases to those contracts. Compounding high inflation is the rise of utilities and price increases mainly in the IT, public safety and construction related portions of the budget.
Staff increases are projected for: 6 new patrol deputies; 2 in the County Attorney’s office; 2 in Youth Service Center; 1 in Public Works; and 1 in elections.