On the line
County decides to absorb lost revenue
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LAKE COUNTY – Tax values for an energy company running transmission lines through Lake County were reduced at the last minute, causing an unexpected loss of revenue for the county, and commissioners chose not to ask property taxpayers to pick up that loss.
“We wanted to keep people’s tax bills reasonable,” Lake County Commissioner Gale Decker said.
The Montana Department of Revenue settled an agreement with NorthWestern Energy on Oct. 14 to lower their appraised tax value from $2.6 billion to $2.4 billion.
“This results in a $10 million reduction in NorthWestern Energy’s 2016 property tax bill from $144 million to $134 million,” the Department of Revenue stated in a news release. “Although, it is a $12 million increase from the company’s 2015 tax bill of $122 million.”
Forty-one counties in Montana were affected by the change to NorthWestern Energy’s tax bill and 15 were not affected.
“Lake County’s loss of tax revenue was just over $25,000,” Decker said. The Department of Revenue asked affected counties to recertify tax bills for property owners so that each county’s lost revenue could be redistributed to property owners or counties could choose not to recertify and absorb the loss.
“We could take the money lost and spread it among the other taxpayers in the county,” he said.
The commissioners considered several things before deciding what to do, including the fact that 19,000 tax statements had already been printed.
“We would have had to reprint them all,” he said. The reprinting process would put tax collection behind one month, which is a problem for agencies depending on that revenue.
“The school districts and the county operate on reserves and they would have had to wait longer,” he said. “The county also had bills due on things like road equipment.”
The lost revenue will be absorbed by county agencies.
“We are spreading it across Lake County including things like school districts, senior centers, and the sheriff ’s levy,” he said.
Decker explained the loss of revenue to high schools in the county as an example of how that loss will be divided among the agencies receiving revenue. He said nine high schools from Arlee to Hot Springs will lose about $5,000 total, which is about $550 for each school.
Lake County didn’t see as big of a loss as other counties from NorthWestern Energy’s tax change. Decker said Missoula County lost as much as $400,000. He said counties with more transmission lines saw a greater loss.
“If we would have lost more, we would have had to recertify, but as it is, we are holding our own,” he said.
The Department of Revenue said everyone acted quickly to develop solutions. “The department wishes to thank the many local governments and schools, and particularly county commissioners and treasurers for their attention and quick turnaround deciding whether to recertify,” said Mike Kadas, director of the Montana Department of Revenue.
