MISSOULA — The city's proposed budget for the new fiscal year will include savings from the current year while funding various services and positions through “creative non-property tax” strategies.”
But the final tally will still bring a 3.5% tax increase and roughly $4.4 million in new spending. Most of that will go toward inflationary increases and wages.
“This budget reflects our commitment to financial stability, responsible investment and responsive public service,” said Mayor Andrea Davis. “We've made steady, meaningful progress while maintaining essential services, and we're doing it with the aim of a minimal impact to taxpayers.”
The city budget looks to spend $2.4 million less this fiscal year than originally budgeted.
The savings will enable the city to end the fiscal year with roughly $3.1 million in cash reserves, nearly $1 million more than projected.
“This is a tangible step forward,” Davis said. “We're building a healthier financial foundation. We're also chipping away at the structural deficit.”
The structural deficit has lingered for years and reflects the city's cost of operations versus the revenue it brings in.
Davis said the new budget reduces that deficit from $3.1 million to $2.4 million.
Still, it leaves the city $1.9 million shy of meeting its cash reserve policy, which calls for 7% of ongoing revenue to be held in reserve.
The city hasn't achieved that figure in years, and Davis said she'll remain focused on eliminating the deficit.
“I'm committed to doing so responsibly and thoughtfully, with limited disruption to city staff and services,” she said.
Savings within the budget include $75,000 through the city's insurance deductible, $200,000 in fees generated by short-term rental registrations and $100,000 in health department licensing.
The city will also save $1.8 million by closing the Johnson Street shelter.
“The decision to close the temporary emergency shelter was a difficult one, but it was necessary given our limited resources and the need to protect core services,” Davis said. “At the same time, we're continuing to invest in our housing and houselessness programs.”
The city will seek savings in other areas as well, including overtime at the police department and funding two new street maintenance workers through the state gas tax and not the general fund.
Davis said every job opening funded by the general fund will also require administration review.
Despite the savings, the new budget calls for $4.4 million in new spending, with 80% going to wages and 15% toward contractual increases. Just 3% will go toward new staffing, according to the city.
The city's total expenditures amount to $121 million.
“We anticipate a 3.5% increase in property tax funds. This includes the fire levy, the general fund, and the road and park districts,” Davis said. “Depending on how the tax values shake out, that may effect this number.”
The Montana Department of Revenue is expected to release its new taxable values on August 4. The city must adopt the FY26 budget later in August.
