BILLINGS — After scaling back the ask, the Billings City Council will float a mill levy on Sept. 15 hoping to repeal and replace the 2004 public safety mill levy to generate an additional $4 million for the city.
While passing the 2021 budget Monday, the Council worked under the assumption that the levy would pass. If it doesn't, a larger series of cuts or bigger dip into the reserves could be in the cards.
"If it does not pass, we will have to look for the same menu of options: potential budget cuts, which would very much impact public safety and the parks department, possible increase of Park District 1, which would cost people more dollars, or using up the last of our reserves. None of those are very good options," Billings Mayor Bill Cole told Q2 Tuesday.
The public safety mill levy ask is a much smaller one then the Council was originally aiming for earlier in the year. The economic uncertainty brought about by COVID-19 influenced the decision toward the smaller levy that will generate $4 million in new money.
“That’s about 25 percent of the size that we were originally planning to bring to the voters before the coronavirus impacted our economy. We thought about waiting until next year, but none of the 11 city council members thought that was an option," Cole said.
If the levy passes in an all-mail election, the owner of a Billings home worth $211,000- the median home value- would pay an additional $57 per year on their property tax bill.
In January, the goal was to grow public safety services, adding more money for police, fire, 911 dispatch, city prosecutors and city hall space for public safety, Cole said.
"That would have been great. But nobody thought that it would be responsible to go to the voters and ask for that much in today’s world of COVID-19, where our economy has been impacted so greatly," Cole said.
The upcoming levy vote will help to stave off a recurring approximate $7 million shortfall in the city's general and public safety funds, which are composed mostly of the police and fire department budgets.
Cole said little additional money has come into the general and public safety funds over the years. Instead, the cost of service has gone up due to inflation, and the city has hired more police and firefighters.
“The biggest part of the city’s budget comes from fees that the city charges for water, sewer and other services. And that part of the city’s budget is in very good shape. But public safety ... is funded mostly by property taxes, and the city charter prevents us from just raising property taxes. So, for several years, our public safety costs have gone up, but the general fund revenues have stayed pretty flat," Cole said.
Cole said it also didn't help that the city lost about $2.5 million per year from the elimination of franchise fees charged to some Heights residents' water and sewer services in 2018.
Since the levy's possible passage wouldn't entirely fill the $7 million shortfall in 2021, the Council made cuts to the police, fire and parks departments along with a few others Monday night to balance the budget for the year.
But Cole said the city government will likely be back before the voters with another ask sometime in 2021 to try and fill the approximate $3 million gap in 2022.
"We want to be transparent with the voters and make it clear that the September levy will not completely close our budget gap and it won’t provide those new resources for public safety. Therefore, it’s likely that we’ll have to come back to the voters in future years. Right now, this is simply triage and some may criticize the City Council for not asking for more. But there’s just so much uncertainty from COVID-19 that we didn’t think that would be a responsible thing to do," Cole said.
