City, county begin budget discussions for Fiscal Year 2023

Pandemic-era local tax breaks are out and inflation is up. Both city and county commissions met this week to hold preliminary budget discussions with the start of the 2023 fiscal year on July 1.

Both bodies have held discussions with staff regarding budget needs in the upcoming year and each discussed how rising inflation would affect budgets in every department. Final decisions on the budget will be decided closer to the end of the fiscal year in June, with the city planning to present the formal budget transmittal during the June 21 work session.

The city is expecting to see total increases of $1.3 million in general fund revenue. After two years of not increasing the inflationary factor due to the COVID-19 pandemic, the commission is expected to increase it to 3.75%.

“You'll likely hear me say we're not going to be able to not take that inflationary factor another year,” City Manager Greg Doyon said. “We gave people the fullest break that we could, but unfortunately, our costs are going up as well and there's just no way around it.”

Finance Department Director Melissa Kinzler said the inflationary factor percentage is a three year average of the Consumer Price Index divided in half. The all items index, which factors in costs from food to fuel, increased 8.3 percent for the 12 months ending April, slightly down from the 8.5-percent for the year ending in March, according to the Bureau of Labor Statistics.

This inflationary factor would bring in an additional $641,000 for the city. The expected increase in Mill Levy due to Newly Taxable Property is expected to be at $400,000, but won’t be confirmed until August.

This isn’t the first time the city has delayed the inflationary factor, with Kinzler pointing to how the city didn’t take the inflation increases in 2011 and 2012 to fund the COPS grant, delaying until 2013 which saw an increase of just over 3%.

Mayor Bob Kelly summarized a budget roundtable discussion held with department heads during a special work session Monday. These included supplies like fuel and paper, overtime needs and lack of personnel, especially in the fire department.

Doyon referred to what he called the “Taco Bell effect,” where the advertised wages at fast food restaurants are higher than what the city pays in some cases.

He said the city offers benefits, but that “for this generation, it's not all about the benefits.”

“Back in the day, we used to say well, you know, the city is a stable employer, and there's opportunity for growth and we have great benefits so we can kind of get away from having to worry too much about the wages,” he said. “But that just isn't the case anymore.”

Doyon said citywide unemployment is currently at 2.8%.

This discussion comes on the heels of several tax abatement decisions made by the city, including the most recent vote to give Calumet Refining a tax break for their renewable fuel conversion project. The project would be taxed at 50% for the next five years, getting up to 100% in 2031. The estimated tax reduction for the city over the next decade was estimated by the Department of Revenue to be just over $2.7 million, according to the May 3 agenda background.

The city also has outlined in their priorities to explore the option of a Public Safety Levy.

The county met Thursday for its fourth quarter review of their budget preparing to go into the new fiscal year.

County Budget Officer Mary Embelton said that the state of the general fund was “in good shape.”

The county is anticipating $6.4 million in 2023 real property taxes, $128,000 in personal property, meaning taxable property that isn’t land, and $2.5 million in motor vehicle taxes. The county won’t have the final numbers until the Department of Revenue releases them later this year.

The county, similar to the city, noted rising costs of fuel as well as office supplies.

Commissioners discussed coordinating with some of the entities that receive significant funding from the county to have representatives come and present on the return on investment, like the Great Falls Development Authority and the Paris Gibson Museum of Art.

Cascade County is the largest investor at GFDA donating $60,000 and Commissioner Joe Briggs sits on their board.

Paris Gibson is allocated $66,000, with the budget line item citing a Memorandum of Understanding between the county and the museum going back to 1993.

Commissioners discussed budget items like contributions to the Montana Coalition of Forrest Counties, with Commissioner Jim Larson saying that the operations were geared towards heavier timber counties. Briggs said to make a note to remove it, but that there would be more discussion later.

The price of veteran burials is also increasing as the number of deaths rise. Burial fees in the budget were listed at $250 and headstone settings were at $70 and with 210 veteran burials the cost came to a combined $67,200.

The county is also seeing issues with employee retention in departments like the Cascade County Sheriff’s Office. The issue was discussed recently at both Sheriff’s debates, with both candidates saying that retention is a nationwide issue. Incumbent Jesse Slaughter said that he’s looking at potential perks for Detention Officers like adding a vending machine and adjusting scheduling to help workers. Opponent Jay Groskreutz said he would look to businesses in the community that have succeeded with retention for advice.

Embleton said that the county will need to submit a budget report by June 10.