Tax bills: how to understand them and how the money is allocated

Did you know that not everything on your tax bill goes to fund Missoula County government? That's right, taxes go to fund special districts, school districts, voted levies and more! If you'd like to learn more about the details on your tax bills and how the money is allocated, in this episode Missoula County Clerk and Treasurer Tyler Gernant explains the details and helps clear up common questions. 

Also, the FY22 Budget in Brief is now available online at missoula.co/budgets and gives a brief overview of how Missoula County will allocate its portion of the tax bill. 

Tax bills have arrived and are posted online at www.missoulataxes.us. Tax payments for the first half of the year are due by 5 p.m. Tuesday, Nov. 30. Tax payments are currently being accepted and online payments may be made via credit card, debit card or electronic check. Service fees apply when paying online by credit or debit card. The fee for paying by electronic check has been removed for all transactions when paying online.  

#tots #missoulacounty #missoulacountycommissioners #localgovernment #community #stayengaged #taxbills #understandingtaxes #missoula

Thank you to Missoula's Community Media Resource for podcast recording support!

Transcript

0:09

Well, welcome back, everyone, to Tip of the Spear. Today we are joined by Missoula County's very own clerk and recorder and treasurer, Tyler Grant. Also, as usual, we have a complement of Missoula County commissioners here. I'm Dave Strohmaier. I'm joined by Commissioner Juanita Vero. Commissioner Josh Slotnick is not able to make it today, but Tyler is one of 11 elected officials here in Missoula County government and clearly wears multiple hats by being the clerk and recorder and also the treasurer. Well, Juanita, do you want to kick things off here? Yeah. Tyler, thanks so much for being with us today. Like Dave was saying, you wear multiple hats, so can you give us an overview of your office and the different services your folks provide? For sure, and thank you for having me today. I so, technically speaking, our office is consolidated for different offices consolidated within one. We go by clerk and treasurer, but we're technically the clerk and recorder, the treasurer, the surveyor and the assessor. All of those offices consolidated into one. Of course, a lot of that is services that the public doesn't generally see. So in terms of what the public would generally see us doing, there's four main services that our office provides. Probably the most obvious one, I would say, is titling your motor vehicles. So if you need plates for a car, our office is where you're going to come to get those. And we don't do driver services. So if you need a driver's license, the State Department of Justice does that out on Palmer Street. But if you need plates or to renew your registration our office is where you come, the second major service that we provide is, of course, what we're here to talk about today, which is property taxes. We obviously don't. We don't set the tax rates or, you know, do any of the budgeting or any of that kind of stuff. But we are the office where all of the taxing jurisdictions submit their tax data. We put them all onto one consolidated tax bill for local governments and local taxing jurisdictions. We send those out, collect the taxes and then disperse the tax money so that your local governments can function. The third service that's our office does is basically what I would call land transaction records, so any subdivisions, condos, town homes, if you buy or sell a house or a property of real property of any kind, really, you're going to record that in our office. And because we're the last step in the subdivision process, we're also responsible for making sure that all the steps prior to recording that subdivision have actually been met. So we have to check that every sort of agency that has a hand in subdivisions has done their parts and has approved the subdivision. And also, of course, if you want to, you know, record the deed to your house, we're where you do it. And that's what puts on record that you actually own the house, which makes it possible for you to get a mortgage. So it's a very, very important function of our office. And then the last one is what we call vital records and vital records are what you would think of as a birth certificate or a death certificate. And so we can issue birth and death records for any any birth or death that happened in the state of Montana. But we're responsible for maintaining the records for all of the births and deaths in Missoula County. So those are the four main services offered by our office that the public sees. Yeah, super important work that I think oftentimes flies under the radar, but vital to carrying on our daily lives here in Missoula County. So you mentioned taxes and tax bills went out on October 30th. Is that correct? That is correct? Ok. So when folks take a look at those there's there's going to be a lot of detail that's displayed on the tax bill. Could you talk a little bit about the breakdown of different funds and also taxing jurisdictions? Because I think there's oftentimes confusion since the tax bill is coming from Missoula County. Therefore, in some folks minds, that is all going towards Missoula County government, and that's not the case. So just talk about that tax bill a little bit. Tyler. For sure. And I think a lot of people are surprised by just the sheer number of things on your tax bill. So you'll notice that there's, of course, when you get your tax bill, there's going to be two coupons on the top of it for your first and second half. What we're talking about here is the general tax detail. And so there's a box underneath that that says general tax detail that's going to list out the taxes for your big tax jurisdictions, which is the city of Missoula. If you live within, the city is going to be listed on there first. Second is going to be the County of Missoula unless, of course, you live outside the City, in which case the County will be first. The County we we break, we're statutorily in a lot of instances required to break out the taxes into different funds. And so there's a lot more detail listed in the County's general taxing jurisdiction than there is in the cities, which is just listed as a general fund. Next is going to be your local schools, and that's what you would think of as your local elementary district and the high school district for the County. And then then you're going to see special districts. These are the special districts. This is where it gets a little confusing for some folks because there are some special districts that will also that will appear in the special assessments box, which I'll get to in a second. But these are the special districts that are calculated based on the market value of your property. And so these ones are based on what we'd call a mill levy, and the mill levy is just essentially the tax that gets applied to your taxable value, which is derived from your market value. Other special assessments are derived through a different formula, and so that's why they get put in a different box. Typically speaking, those are going to be things like the special districts or things like the Missoula Urban Transportation District is a good example. So that funds Mountain Lion and those are based on property values. Next up is the state school, and that is a combination of a couple of things, but primarily the equalization levy. Montana has a constitutional obligation to equally fund our schools so that those that live in poorer areas don't get a subpar education as compared to those that live in wealthier areas. So this is one of the ways that Montana does that. There's also, of course, the university levies the two mill levy that we vote on every 10 years is in there. So these are the things that go to a statewide school formula. The next thing that you'll see on there, and actually, I should, I guess I should point out to there's something new on the tax bills this year, which we haven't done in the past. But this year we marked out the levees that are that have a devoted contingency. So if voters voted for a portion of those taxes, it'll show on the levee itself. It'll say, voted, next to it in parentheses next to the end of the description. And then there's also a an asterisk system that shows you if those are new mill levies that have just been voted in. If they were voted to increase a little mill levy that was previously submitted to electors. And then if you voted to exceed the mill levy limit, which you're allowed to do under Montana law, so. Those those asterisks are only for the last election cycle, but for all of them, it'll show whether it's voted. So then the next part that you get to is these special assessments, and these are where it gets a little more confusing, primarily because these can be a whole different range of things. So for instance, there's a city road district, there's a city park district. They derive their taxable or the tax is derived from a totally different formula. So, for instance, the road district is in large part based on your square footage of road frontage. If you have a lot of road frontage, you're going to pay more in the tax. And if you have less road frontage, then there's other ones, like the Water Quality District, which is based in part on your water usage and your sewer usage. And they sort of generalize those for the size of your building for a lot of them. But if you're somebody who is using a whole lot of water, you're going to pay more in the Water Quality District. But then there's also some that are like the open space. Those are actually based on values. But there are certain types of property that don't pay that. For instance, agricultural property and forest property don't pay open space taxes because they're already open space. So that's why those get put in that second box of special assessments. And so I don't know that there's a real sort of good way to summarize all of the different taxing jurisdictions. But those are those are sort of a very, I call it a 50,.000 foot overview of the different taxing jurisdictions. Yeah, that's that's super helpful. One thing you mentioned earlier is first and second half, and someone might initially wonder first and second half of what. So how does the actual tax payment that folks will be making right now, map against the calendar or fiscal years? How does that all work? So it's super confusing, and even people who do this a lot tend to get confused by it, but it is actually broken out by the calendar year. And so the first half taxes actually cover the period for January 1st of a tax year through June 30th of a tax year. But all of our taxes are built in arrears, so you're going to get a bill, you know, in the next couple of days, really. And the first half payment is due at the end of November, and that covers the period from Jan. 1, 2021 to June 30, 2021. Then at the end of May, in twenty twenty two, you're going to have that second half is due. Well, that payment that you're making in May of 2022 actually covers the period from July 1, 2021 to Dec. 31, 2021. And so all of these are based off of the property how the property was as of Jan. 1, 2021. So if you're building a new house, you don't actually pay the taxes on that house until you know that Jan. 1, 2021 date, because that's when they assess the value. It also means that if you have a subdivision or anything like that, they do it based off of when what the property looked like on that date Jan. 1, 2021. Got it. This is impressive. So these special districts and the school districts. How does the Department of Revenue reappraisal impact them? So again, because the special districts can be assessed differently, they can be based off of square footage or road frontage or water usage. There's a whole different whole bunch of different things. They can be based off of it. It can affect them differently than it affects your general taxes and your schools. For instance, your schools are based off of a mill levy, but it's kind of a weird, backed in formula. And then your city and county are based all off mill levies, so the reappraisal really affects your city and county taxes. It naturally affects your school taxes because the higher your market value, the bigger your share of those taxes. It, depending on the special district itself, can affect the taxes for that special district less. And a good example of that is the Water Quality District. It it doesn't really change. I mean, sometimes it'll go up a little bit, but it doesn't change based on your market value at all. That's going to be a tax that remains pretty consistent year over year. And how does, I mean, is there other roles that your your office plays in these procedures or It's, we get a lot of questions about it. And so we try to act as a sort of clearinghouse of information. But ultimately speaking, the reappraisal is going to be something that the Department of Revenue does. And they're the entity that is constitutionally actually obligated to do these appraisals and they do them every two years. So that is a change from how it used to be. It used to be once every six years. And then those values were phased in over time for, I would say, for better or worse. But I think most people would agree, probably for worse after the downturn in, you know, 2008, 2009, a lot of folks recognize that it was not a very fair system because they had just gone through a reappraisal. They were at the peak of their values and then there was a big market crash. And by the time there was going to be another reappraisal, the market had mostly recovered. And so all of those values that had gone down that never really got captured in your taxes. So a group of folks went to the Legislature to get them to change it, to be every two years to reflect a more consistent approach to the market, saying we want it to reflect the downs as well as the ups instead of just the downs or instead of just the ups. Unfortunately, of course, since that time that was in 2015, our market has done nothing but skyrocket. And so we haven't really seen the the downturn, which, you know, is a good thing for most people that you don't want your house to lose value. But in terms of your taxes, of course, that means your taxes have just gone up and they've gone up at a higher rate. I would say in terms of the market, value has gone up much higher than it had in the last six years. So do you think that it's time to reevaluate, I guess legislatively whether the reappraisal cycle should be every two years or something longer? You know, from a personal standpoint, I think the phased in values made it easier for people because you could you could sort of plan out your taxes easier. You knew what it was going to be from from my standpoint of actually explaining taxes. The two year reappraisal cycle is really wonderful because there was a fairly complicated formula before where it was. You got your appraisal. It was phased in over six years, but there was a homestead exemption that was also calculate where a number of exemptions actually that were calculated into that. And so trying to explain to somebody how your market value turns into your taxable value became sort of a nightmare. But at the same time, it made for it made for a steadier rise in your tax bill as opposed to, you know, a lot of folks today are seeing a $1,000 increase. And some folks are, you know, there are. I say this every time there's a reappraisal cycle, there are people whose whose property lost value, who actually are seeing lower taxes today than they did a year ago. And so the six year appraisal cycle phases that in for both the ups and the downs for folks. So talk to us a little bit more about that because typically I've heard from, or experienced personally, just an upward trend in appraisals. But it sounds like are there actually places in Missoula County that saw a drop in the appraised value of their property? There are definitely there are. There are definitely places that have seen a drop in the value. They aren't. There aren't a lot of them. I don't mean to say that there's a lot of them out there, but there are definitely some that have. I know of one in particular that was by East Missoula and they their property actually did go down in value. And I couldn't tell you why, but it did. Well, I guess, speaking of of the possibility of one's appraised value going down in value. Maybe describe the process by which if you got your appraisal notice from the Department of Revenue and as as you were reading the fine print notice that huh, it looks like they have me down for two bathrooms and I only have one or it has me down for a half a basement and actually, I've got or it has me down for a full basement and actually I just have half a basement. What's the process to adjudicate those discrepancies or those variations? That is an excellent question, and I'm going to actually hit on another point, too, that I think you maybe inadvertently made. But it's super important when you get those reappraisal notices, you have 30 days. I mean, it's past the time now for this last reappraisal cycle, but you only have 30 days to to what they say protest at which generally speaking, means filing this form called an AB26, which is an informal request for reappraisal. If you don't do it within that 30 day period, you can continue to do it, but it's not going to affect that tax year. So you basically miss out on one full year if there was a mistake in your value. A lot of folks tend to think that they can come into our office and pay their taxes under protest once they've gotten their bill. And you'll probably see a whole lot of people on Facebook saying, "pay your taxes under protest, you know, don't don't pay them, don't just pay them, pay them under protest." That doesn't do. It really does almost nothing for you unless you filed that AB26. How difficult is it to get that form or find that form? The form is really easy. It's online. You can actually fill it out online, too. You have the option to either print it or just submit it directly online. And it's I mean, it really is a quite simple form. And for folks who are challenged, I mean, honestly, my best my best advice is to type in Montana Department of Revenue and then go to their property tax section. You'll see it in there and it's there's going to be a file of property tax appeal or actually it'll be called an appeal. Can they also call your office? They can absolutely call our office. They can also call the Department of Revenue. There's, there's many different avenues, and all of them will lead you back to the same place. But we can all get make sure that you get there and then, you know, you can also, quite quite honestly, aside from calling our office too, you can also just do a search for that AB26 and AB26 is only going to bring up one thing because that's an odd, odd Google search, but sort of back to Dave's original point. If you find what you want to do is you're going to want to go to the Montana cadastral, or you can call the Department of Revenue. And if you need the Department of Revenue's phone number, it's 406-329-1400 in Missoula. If you call that number, you can get your property record, and that's going to show you what they have for your property. Whether it has three bedroom, two bath, it'll have the condition of your property. If it has a shed. Any of those things, you want to check that against your actual property. And if there's something wrong, you want to file that a b twenty six because that a b twenty six is going to send an appraiser out to your house to inspect it. And if they find that, say they have you listed for four bedrooms and three bathrooms and you're really a one bedroom, one bathroom house, they'll adjust the property record and then you can request a refund for the last five years of taxes that you paid in error. Oh, that's that's super helpful, and I get from time to time, even this afternoon a question about this very thing. So I bet there are folks out there who are not aware that that there might be this misalignment between what they're being taxed at and and the actual description or the actual what's on the ground at their property. So it's a pretty frequent. And the other thing I will say is occasionally you're going to get a property tax appraisal, someone from the state coming to your house to look at your property. It doesn't happen all that often, but I can attest that I've had it happen personally. If you don't let them into your house, then you're not eligible for that refund. So obviously, if you're not home, that doesn't count. But if they come to your door and say, "Hey, we'd like to inspect your property." And you say, "No, I'm not going to let you in." Then if they find an error later on, then you don't get that refund. And the theory being, of course, if you would have let them in to inspect, then they wouldn't have made the error. Is there any way just occurred to me anyway to know whether this is a legit person who's coming to inspect? Because I suspect if someone just knocked on my door and said, I'm with Department of Revenue here to look through your home, I may or may not be suspect. They'll show you their business card that has their name and says the Department of Revenue on it. But of course, that could easily be replicated. So but presumably if you've asked for the reappraisal, that would be an indicator that if someone shows up shortly thereafter. That this is the real deal. Absolutely, and you always have a right to, you can ask them to reschedule the appraisal, too. So if it's somebody, if someone comes to your door and you say, I would like somebody here, I just don't trust, you can always say you can always refuse it then and call the office with the number that I just gave out the 406-329-1400, and request somebody come for the reappraisal. Great. Yeah, well, what's the best way for folks to pay their taxes? Well, that that is an easy answer. The best way is to pay online. So if you pay online, you have two options you can pay with a credit card. There are service fees associated with that. And that's just because we get charged credit card processing fees. And so I am not going to necessarily say you should pay with credit card, but there's an electronic check option as well, which is basically going to be the same thing as if you were to mail a check to us. We're going to it's going to get processed virtually the same way and that that portion has no fee. So if you pay via electronic check, there's no fee. You can immediately get a receipt and print it off. And so you've got confirmation that you paid your taxes and it will happen immediately. So that's the best way to do it. The alternative to that, obviously, is you can either come into our office or you can just pay through the mail. If you do mail in a check, you want to include the coupon. Like I said, it's a detachable thing it comes with. Your tax bill will come with remittance envelopes, so you just take off that first half coupon, put it in with a check into the remittance envelope that comes with that and mail it in. We go by the postmark date. So if you mail it on November 30, we will count the payment as timely as of November 30, even if we don't get it until December 5th. Well, there is an awful lot more that we could talk about. Your office does so many important and really cool things. We could talk a bunch about mapping. You've got a very interesting mapping project countywide underway, other processes and core services that you deliver. So we'll definitely need to get you back. But in terms of the tax issue, anything else that you would really like folks to know about all things taxes in Missoula County? I mean, the only thing I can say is, I know, I know a lot of folks feel the strain and the stress of the taxes, and I certainly can understand and relate to that. I think it's also important to recognize what the taxes are paying for because there's a lot of very fundamental public services that these taxes go to pay for a big portion of it over 30% in every instance, and in most cases, closer to 40% goes to local schools. And so local schools make up a huge part of that. And I think obviously education is a big part of what our community values. So I recognize this as a pretty big burden on a lot of folks. But there's also a pretty big benefits, And at least a portion of your tax bill is from voter approved levies or or bonds to further what's so many folks in Missoula County value. And and so it's not simply it's not simply the governing body arbitrarily and capriciously laying down the the tax levies, but many folks in Missoula County have voted to tax themselves. You know, I know there's a saying that your budget reflects your values. I think your tax bill also generally reflects our community's values, and you get to see that a little bit clearer this year. I'm glad we were able to put on the voted levies part because I do think that helps. Yeah, well said. Well, thank you so much for taking the time to come on over here and hope to have you back again. Yeah, thanks. Commissioners, I appreciate it. Thanks, Tyler.