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City Council candidates debate taxes, revenue, reality in downtown Missoula forum

Missoula City Council Forum
Posted at 1:08 PM, Oct 11, 2019
and last updated 2019-10-11 16:13:30-04

MISSOULA — Taxes and economics led the conversation when all but one candidate running for a seat on the Missoula City Council answered questions from members of the Missoula Downtown Association earlier this week.

Several candidates maintained their stance that cutting spending would lead to a decrease in property taxes, though they also lobbied for increased spending in other areas.

To save money, those candidates suggested not printing in color, cutting proceeds for public art, cutting back on health care benefits for city workers, and in one case, exploring the need for dozens of city jobs.

“In the 2020 budget, they have over 30 employees that were asked for that’s going to add another $2.8 million to the budget,” said Ward 2 candidate Brent Sperry. “Just in the last 5 years, we’ve added 78 employees, not including the water company, and our population has only grown by 4,000.”

Sperry’s claim couldn’t immediately be confirmed for accuracy, though this year’s city budget did add new workers.

They included new police officers, a new deputy city attorney, five employees dedicated to street maintenance and snow removal, a new city planner, and a grant administrator to chase down funds for affordable housing.

Ward 2 council member Mirtha Becerra, the incumbent, said the positions included in this year’s city budget are essential to a functioning government.

She also believes the state’s tax structure relies too heavily on property taxes. It’s one of the only sources of revenue available to local governments, and most agreed the model was on an unsustainable trajectory.

To offset rising property taxes, talk of a so-called tourism tax has gained momentum. Many of this year’s City Council candidates have advocated for a focused tax on tourism as a relief to property owners.

“It’s not something we can address specifically at the local level, but I think it’s our job to at least advocate for diversity of our tax base,” said Becerra. “Right now, we depend almost exclusively on property taxes, and I think it’s time we at least start the conversation at the state level so we can look at other ways to bring in revenue and use that revenue specifically to reduce property taxes.”

The candidates from every ward faced a similar rift in opinion, with one candidate lobbying for spending cuts as a means to lower taxes while the other called such proposals unrealistic, given the rising costs of services and materials.

Ward 3 candidate Drew Iverson, who said he’s running to “serve God and the people,” called property taxes an “injustice” to residents who pay them. He said city spending is “out of control,” but offered no solution to bring down costs.

While Iverson has come out against a tourism tax, Ward 3 council member Gwen Jones, the incumbent, said local governments have a responsibility to “take a hard look at the underlying issues” leading to tax increases, and fix them at the state level.

“I do think we’re on an unsustainable trajectory in terms of property tax increases, so we need to be talking about this,” Jones said. “We need to look at why we don’t have a diverse property tax base and address those underlying issues.”

Jones said an interim committee set up by the Legislature held its first substantive meeting in September to review a future tax bill. During the meeting, two other cities, Great Falls and Roundup, also urged the state to explore a more diverse tax base, saying they were relying too heavily on property taxes to meet costs.

“This is not a Missoula problem, it’s a Montana problem,” said Jones. “We need to understand it, start communicating with other cities and towns in Montana, and work with the Legislature to get better tools.”

Ward 4 candidates Alan Ault and Amber Sherill also shared opposing views on the issue. Ault said the city has a “spending problem” and could find cuts by eliminating several local programs.

“I don’t believe Missoula has a revenue problem, as much as it has a spending problem,” he said. “We have a lot of frivolous spending, areas where we can cut back and tighten the belt. I’m not talking about cutting essential services.”

Ault lobbied for more police and fire on Tuesday, but didn’t specifically state how he’d pay for them. This year’s city budget added two new police officers for the west side of Missoula at a cost of $314,000.

In past debates, Ault advocated for a reduction in the insurance plan offered to city employees, saying the city was “paying out over $700,000 a year” in health-care premiums. On Tuesday, he offered cuts in other areas and didn’t mention cuts to health care.

“Some of the items I see – again, I’m seeing we need to tighten the belt,” he said. “We need to look at things like the art community. I think it’s spending we don’t need to use. We need to look at reallocating it. If you look at the budget, it’s hard to see what we’re spending on.”

Sherrill took an opposing view, saying the city doesn’t engage in frivolous spending. She opposed cuts to health-care benefits, saying people would suffer. Instead, she supports a deeper look at a tourism tax.

“We need to look at that as a community and figure out what the community’s appetite is, but we’d obviously try to tax things heavily used by tourism, maybe hotels, maybe rental cars,” she said. “You can get really specific with that tax. There’s a cap on that of 3%.”

Ward 6 candidate Nick Shontz also supported a look at a tourism tax. The community of Whitefish has such a tax. As a result, he said, property owners receive relief of up to 25% on their tax bills.

“If we taxed everything and I spent 3% more on everything I bought, I’d happily receive $25% back,” he said. “That’s a 22% relief on my part. Cutting corners on wages is not the answer.”

His opponent, Sandra Vasecka, opposed a tourism tax, saying the city could find savings in unexpected ways, including cheaper contractors an colored printing.

“It’s a minuscule thing we do but it really cuts thousands of dollars from our annual budget, and that’s that we just don’t print in color unless we have to,” she said. “It’s such a simple and small thing. I think every department can look to see where they’re letting money slip through the cracks.”

Ward 5 candidate Alex Fregerio supported a wider source of tax revenue, saying cuts proposed by a handful of candidates would have little to no impact on savings. His opponent, John Contos, was the only candidate who didn’t attend Tuesday’s forum.

“We need City Council members who are looking for solutions, not just pointing out problems,” said Fregerio. “We’re going to continue to see tourists and more and more people moving here, and we need real solutions to these problems, and one of the solutions might be changing the state tax structure.”

Ward 1 candidates, including incumbent Heidi West and challenger Amber Shaffer, weren’t asked to address the issue.