City of Glasgow Raises Tax Revenues

The Glasgow City Council voted in a split decision to raise tax revenues for the city by a total of roughly $49,000. The move is likely to raise taxes next year for most Glasgow residents and businesses.

The vote followed a tense exchange between Councilman Stan Ozark and Mayor Becky Erickson as they debated the principle of raising taxes just because they have the ability to do so. Ozark was in favor of an increase, but felt it unnecessary to raise the tax levy to the full amount allowable by state law. He instead advocated to raise the levy to 276.11 mills, raising taxes by just about $25,000 on the year. Council President Rod Karst, Councilman Butch Heitman and Councilwoman Nancy Shoenfelder all advocated for the full increase to 281.11 mills. Councilman Doug Nistler joined with Stan Ozark to support the smaller increase of $24,930.91.

Mayor Erickson highlighted the fact that many of the taxed properties will see slight increases to their tax bill. She stated, “It’s only pennies on that [tax valuation sheet], but when you look at [the totals] there’s so much more money we can generate with pennies.”

Karst furthered his reasoning for maxing out the levy, citing past concerns with how mills had been saved up with the state, but were then removed at the state level. Karst believes that saving up the full levy amount each year is valuable in case of emergency. “I support the full amount,” said Karst. “For a rainy day fund.”

Ozark pushed back on that sentiment citing his concern that the council would just raise the levy the full amount allowable without a proposed use for the extra cash. “If you’re going to raise taxes $49,000, I think you would have a plan to use that money,” stated Ozark before adding that he believes, “The government shouldn’t be stockpiling money.”

Councilman Heitman and the Mayor both objected to Ozark’s assertions claiming that there were ways they could use the money across the city budget to better benefit the town. The Mayor, at a particularly tense moment, said to Ozark, “No one else wants to raise taxes either Stan, so quit treating your co-council people and myself like buffoons.”

The mill levy for the year 2019, taxed the city’s residents and businesses at a total of $1,303,950.63. The new levy will push that to $1,352,945.89. The city currently holds a reserve account of $970,000, according to City Clerk Stacey Amundson.

Since 2016, the city has raised taxes each year with the exception of 2017 where revenue fell by $56,961.20. From the 2016 level of $1,254,020.49 to the current 2020 forecast of $1,352,945.89 the total increase in taxes over the last four years is $98,925.40. From the 2017 low to present, the city has raised taxes by $155,886.60. Those increases are due to the fact that the city council has maxed out the allowable mills set by the state.

Prior to 2016, the city used to set their rate based on the city needs and they would bank the extra mills for future use, but in 2017 the state revoked those “banked” mills. That move effectively zeroed out the city’s emergency revenue stream, and as a result the city has set to building a reserve account in case of emergency by maxing out the allowable mills.

Despite having nearly one million dollars in reserve, the city has not used that money to cover needs and expenses. Last year the city took out loans for equipment (such as a street sweeper for the streets department and a number of self-contained breathing apparatuses for the fire department, among others) valued at $381,500 with an interest rate of 3.15 percent with the Montana Board of Investment, according to the city office.

After the vote passed on a tally of three to two with Heitman, Shoenfelder and Karst in favor and Ozark and Nistler opposed (Councilman Dan Carr was absent) the Mayor ended the debate on tax levies stating, “Again, No one here wants to increase taxes and make things uncomfortable for business owners. Some of us have been there ourselves.”