HELENA — Right now, local governments across Montana are finalizing their budgets for the coming year and getting ready to send out property tax bills. They do that work based on data from the Montana Department of Revenue, which tells governments the total taxable value of all the properties within their jurisdiction.
This year, though, the city of Helena had some questions for the department about how they reached their numbers.
“We're just trying to understand the data going forward so that we can make good budget estimates on our tax revenue,” said Sheila Danielson, Helena’s finance director.
(Watch the video for more on Helena's concerns about taxable values.)
State law sets how much a local government can raise in property taxes. Every year, they’re allowed to collect the same amount they did the year before – plus adjustments for inflation and for “newly taxable value” on things like new buildings.
Danielson said Helena saw $1.9 million in new taxable value in 2024 and they’ve been in that range for the past several years, so she put together a preliminary budget estimate for the city expecting a similar amount this year. However, when DOR made their report to the city, they only identified about $650,000 in new taxable value for 2025.
“It was significantly less than I was expecting,” said Danielson.
She said, after the city asked DOR to take another look, the department adjusted that number up to around $1 million – but she believes that’s still too low, in light of the amount of new construction Helena’s seen, on projects like the Summerville Flats apartment complex.
“That was my preliminary cause for really wanting to dive in a little deeper as to why the significant change,” she said.
Danielson has requested additional information from DOR about how they made their calculations. Still, she says the city had to adopt a final budget based on the information they have now.
“I did reduce the city's tax revenue by $200,000 from our original estimate to our final budget,” she said.
Montana lawmakers did make significant changes in how taxable values are calculated this year. As part of their effort to shift the property tax burden away from residents, they passed House Bill 231 and Senate Bill 542. This year, those bills set up a new tiered system for taxable values, which reduces property tax rates – and therefore the share of taxes – on less expensive homes.
“I think, in the calculations that I did with the number of mills, the average homeowner will see a reduced property tax bill based on the new tiered rate structure,” Danielson said.
Danielson said DOR pointed to the new tax structure as a reason for the surprising result on Helena’s new taxable value. She said the city is also looking into whether a change in how they deliver information about new construction to DOR made any difference.
In the long run, Danielson said ensuring all new construction gets incorporated into Helena’s taxable value was important to balancing the burden of property taxes.
“It spreads it out more, so that the longer-term residents or property owners within the city aren't bearing the full weight of the taxes that need to be raised to provide services to the entire city limits,” she said.
At this point, with Helena’s budget set for this year, Danielson says what the city is mostly interested in is getting more clarification for the future.
“That's why we're requesting the data from the Department of Revenue: We would just like to be able to do our own analysis,” she said.
MTN reached out to the Department of Revenue. A department spokesperson said they had no comment at this time.
