Taxable values increase in Madison County, taxpayers benefit

The economy nationally may be struggling, but locally one indicator seems to point to continued improvement.

This year the taxable value of property in Madison County increased more than 4 percent over last year.

“What it correlates to is that Madison County today is one of the few counties in Montana that continues to see some level of growth,” said Madison County Commissioner Dave Schulz.

What this means for taxpayers is the county will be able to provide the same level of service at all levels without increasing taxes, Schulz said.

And many rural counties like Madison County are seeing taxable values decrease, he said.

“We’re seeing a number of rural counties … where they’re taxable values have been going the other way for the last three, four or five years,” Schulz said.

In Montana, taxable values are the core of how property taxes are assessed and local governments are funded, said Dan Buck, director of the Montana Department of Revenue.

Taxable values are determined by a complicated process that looks at the market value of all property in the county and then runs that figure through a variety of formulas and filters developed by the Montana Legislature.

In Madison County, the taxable property value for 2012 is $77,356,485. This is up from $74,186,637 in 2011. However the market value for property in Madison County in 2012 is about $2.75 billion. This is an increase of more than $1.24 million over last year’s total market value of property in the county.

The taxable value ends up being about 3 percent of the market value, Buck said.

Then mill values, which are how property taxes in the county are assessed, are .1 percent of the taxable value. So mill values for Madison County for 2012 are about $77,356.

Now, mill values will be different for each tax district. For instant, school mill values are determined by the taxable values of the property within a particular school district.

But the upshot of increasing taxable values is that the cost of government is spread out so each taxpayer should be able to see what amounts to a reduction in property taxes, depending on how local governments plan their budgets for the coming year, Buck said.

His assessment of Madison County is that growth here is occurring at a manageable rate, compared to seven or eight years ago at the height of the housing boom.

“At that time, yes taxable value was actually growing at a more rapid rate than today, but you didn’t see the mills go down so much precisely because the service demands were increasing rapidly and somewhat urgently on the local governments,” Buck said.

So during the housing boom, local governments were forced to extend services to new development, which ate up much of the benefit of increasing mill values. Now that growth is more moderate, the county isn’t required to continue to extend services and taxpayers are seeing taxes reduced.

As an illustration, Buck refers to the total number of mills levied in Madison County over the past eight years.

In 2004, there were 319 mills levied in Madison County. That number dropped to 316 in 2005, 302 in 2006, 292 in 2007 and 293 in 2008. These were basically the big years of the housing boom in Montana and Madison County.

However, after 2008 the number of mills levied in the county dropped more significantly – 271 mills in 2009, 265 in 2010 and 229 in 2011.

“This is a sweet spot to be in to have steady, good, healthy growth in the 5 percent range,” Buck said. “What it translates to is manageable budgets, predictable budgets … and the ability to share the advantages with the taxpayers. It’s good growth but its not overwhelming growth.”

Schulz agrees.

The manageable growth in Madison County should be a benefit to all taxpayers.

“We’ve managed to protect our citizens and their obligation to taxes and still provide the services and we only put money where we need it,” he said.

And though each part of the county seems to be seeing at least a little growth, development in the Big Sky area is a driver for growth in the county. However, with that growth comes a responsibility for Madison County to serve those citizens as well, Schulz said.

“Which is why the commissioners continue to support adequate law enforcement and snow removal and other activities up there,” he said.

One Response to Taxable values increase in Madison County, taxpayers benefit

  1. [...] recent article in The Madisonian shows positive growth in taxable value of Madison County, and Ennis MT Real Estate.   According to [...]

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