Billings council reviews implications of Senate Bill 542 on property taxes

In the heart of Billings, city officials gathered under the bright lights of the council chamber to discuss a pressing issue that could reshape the financial landscape for residents: Senate Bill 542. This legislation, which emerged unexpectedly, aims to alter property tax regulations significantly, prompting urgent discussions among council members and city staff.

Finance Director Andy provided a detailed overview of the bill, emphasizing its potential ramifications for Billings. The proposed legislation includes a $400 property tax rebate for the years 2025 and 2026, but the most critical aspect lies in Section 4. This section stipulates that local governments with a mill cap in their charter must levy a specific number of mills in fiscal year 2026, effectively establishing a new cap for future years without requiring a charter amendment. This could lock in property tax rates, limiting the city's ability to adjust for inflation or growth.

The council members expressed concerns about the long-term fiscal impact of this new cap. As the value of a mill may increase due to growth, the city could find itself constrained by the fixed number of mills established in 2026, potentially leading to financial challenges in the years to come.

Another significant point of discussion was Section 11, which proposes that the state would backfill any revenue losses incurred by cities due to the new tax structure. However, this provision comes with a caveat: it would only take effect if a court deems Section 4 illegal, raising questions about the reliability of this safety net. The council is wary of the implications, fearing that if the city is forced to refund taxpayers due to a legal ruling, it may struggle to recover financially.

As the meeting progressed, the urgency of the situation became palpable. Council members debated the necessity of immediate action, with some considering a trip to Helena to engage directly with legislators. The discussions highlighted the complexity of the bill and the potential for significant changes to the city's financial framework.

In conclusion, the Billings City Council's work session illuminated the intricate challenges posed by Senate Bill 542. As officials navigate the implications of this legislation, the future of property taxes in Billings hangs in the balance, leaving residents and city leaders alike to ponder the potential outcomes of these legislative changes.