Great Falls officials outline FY2027 budget constraints and state tax changes that could shift revenue

City officials on April 20 presented a baseline FY2027 budget and warned that recent state legislation and unresolved labor contracts could limit local revenue flexibility. City Manager Greg Doyon said the transmitted budget will reflect the Commission’s policy priorities but is a largely carried-forward baseline subject to change as more valuation data arrives.

Finance Director Melissa Kinzler told commissioners that Senate Bill 117 permits the use of a three-year average inflationary factor capped at 4% and reduces the share of newly taxable property the city may capture; she also said House Bill 231 and Senate Bill 542 required recertification of library mills, leading to a one-time reset of the voted library mills from 17 to 19.55 mills to maintain prior revenue levels. Kinzler cautioned ongoing legal challenges could affect future property valuations.

The discussion emphasized that roughly two-thirds of prior-year city revenue came from charges for services — primarily utilities — while taxes remain the largest single revenue category. Kinzler reported total citywide revenue of $169.2 million for the prior year and explained how General Fund accounting and internal service allocations operate.

Commissioners pressed for clarity on key drivers. McKenney asked for a General Fund total and staff confirmed it is approximately $43 million, with property taxes and related levies forming a significant share. Doyon highlighted that the city’s limited revenue growth constrains options and that many departments are focused on maintaining existing services rather than expanding.

The presentation also noted labor costs as a primary pressure: about 75% of staff are covered by collective bargaining agreements, and settlements or arbitration outcomes for unresolved groups — notably the Fire Department and the Plumbers’ Union — could require retroactive compensation and additional budget adjustments. Finance staff said increasing health insurance costs may require use of the permissive medical levy for FY2027.

The City Manager said the budget process will include follow-up information and that a formal budget will be transmitted on schedule for Commission review and amendments. The Commission did not take formal action during the session; the staff presentations were informational and intended to inform subsequent budget decisions.