Missoula County property owners: Raise your hand if you knew this fiscal year is the last year you’ll be paying for a $17.1 million general obligation bond approved back in 1996 to build the Missoula County Detention Facility.
As voters prepare to decide Nov. 6 whether to approve a new, $15 million general obligation bond for the preservation and acquisition of new open space and agricultural lands, the Missoulian has compiled a list of all the voter-approved bonds on property tax bills in the county.
County and school district voters have approved six general obligation bonds since 1996 that are still on the tax rolls. The money has been used to preserve and buy wildlife habitat, hiking areas and farmland, build the new Fort Missoula Regional Park and other parks, construct new school buildings and renovate existing ones, build a new jail and finance a soon-to-be-built new library.
They've come at a cost, however, of a combined increase of roughly $285 on the property tax bill of a home valued at $200,000, depending on where you live. The tax bill varies each fiscal year.
For this story, the Missoulian is providing a breakdown of the tax impact on a home with an assessed market value of $200,000. We chose that number for simplicity, although there are many homes in the county with an assessed market value below and above $200,000.
Bond issuances are complicated, and some of the voter-approved bonds have been divided into several issuances by county administrators, meaning their tax impact varies from year to year. For simplicity’s sake, we’ve tried to minimize the mind-numbing details as much as possible. All taxpayers in the county pay for the bonds, except for the school bonds (as explained below.)
A fiscal year in Missoula County runs from July 1 until June 30 of the next year. So, fiscal year 2019 began on July 1, 2018, and ends on June 30, 2019.
Here’s a breakdown, according to Andrew Czorny, Missoula County chief financial officer, and Pat McHugh, Missoula County Public Schools executive director of business and operations:
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There is one payment left in fiscal year 2019 for a $17.1 million general obligation bond passed by voters in 1996 to build the Missoula County Detention Facility. The last payment will lower the annual tax bill of a home with a market value of $200,000 from $11.87 in fiscal year 2018 to $8.67 in fiscal year 2019. In fiscal year 2020, the tax bill for that particular bond will be zero as the debt payment tax will come off the books entirely.
In 2006, voters approved a $10 million general obligation open space bond. The county split the original authorization into three separate bond issuances. That's because, according to Czorny, it would better match the time frame needed to acquire the open space bond easements. The first will be paid off by taxpayers in fiscal year 2019, and right now the total tax bill for the bond is $8.67 on a $200,000 home. After that first one is paid off, the bill will be approximately $5.48 until 2037 (although the final year’s bill will be slightly less).
The $42 million Parks and Trails bonds were passed by county voters in 2014. These bonds added debt service payments that were placed on the tax bills in fiscal year 2017, Czorny said, and at that time taxed a $200,000 home $33.43 annually. Now, in fiscal year 2019, the bonds will cost the same homeowner approximately $32.97 or less until the bonds are paid off in 2036.
The combined $158 million Smart Schools 2020 bonds — one elementary and one high school — were approved by voters in 2015. Of that, in 2016 the school district issued $51.64 million worth of bonds in the elementary district and $22.785 million worth of bonds in the high school district that will be paid off in 2036. In 2017, MCPS issued the remainder, $36.36 million in elementary and $47.215 million in high school, that will be paid off in 2037. On average, the combined elementary bonds will add $148 per year on a $200,000 home and the combined high school bonds will add $66.07 per year on a $200,000 home. Those payment amounts assume no offsetting state aid for debt service and assumes no growth in district mill values. McHugh, the MCPS business director, said state aid for debt service, along with what he expects to be growth in mill values over the next 20 years, could reduce the tax impact on a yearly basis. If you live in the MCPS high school district, you pay only for the high school bond issue. If you live in the elementary district, you pay for both the high school and elementary bond issue. Not every taxpayer in Missoula County lives within the MCPS high school district or elementary district. A map can be found online at ftp://ftp.ci.missoula.mt.us/DEV%20ftp%20files/Maps/UFDA/LowResMaps/SchoolDistInfo.pdf.
In 2016, voters approved a $30 million bond for a new Missoula Public Library. That was segregated into two separate debt issuances by the county. In fiscal year 2018, the first bonds were issued and added to the tax bills, which increased taxes on a $200,000 home by $2.45 a year. In fiscal year 2019, the debt service for the rest of the bonds will add another $18.98 to the example home for a total of $21.43 per year until 2038 (although the final year's bill will be slightly less.)
Missoula County voters will decide in November whether to approve a 20-year, $15 million general obligation bond for the preservation and acquisition of new open space and ag lands. It would add an additional $13.46 per year on the property tax bill of a home with a market value of $200,000. Voters within Missoula city limits will also decide on a Conservation and Responsible Stewardship Perpetual Mill Levy of 4 mills, which would add $10.80 per year to a $200,000 home in perpetuity.
Czorny said that as a home grows in value, "so does the tax on a perpetual 4 mills supporting additional open space."