Clarification: Fixing our budget fix report

In our July 9 story about Senate Bill 117, we made an error that oversimplified the law’s impact on property owners and local governments. This article seeks to right that wrong. Hold on for the ride.

Signed into law in May, SB 117 promises to reshape how county and city governments construct their budgets each year. But it is unlikely to uniformly deliver, as we asserted, “higher taxes for property owners and relief for local governments.” Rather, its effects are likely to differ from place to place and year to year — reflecting a balancing of local government needs and citizen demands for lower taxes.

The law does all but eliminate the inflation cap that, since 2001, has barred local governments from increasing core revenue by more than half the average rate of inflation (as measured by the Consumer Price Index, or CPI). For nearly a quarter century, every county and city in Montana could only raise property taxes by half the inflation rate, regardless of how quickly their costs had increased over the previous year.