McGrath: Counties Can Increase Mill Levy to Make Up Funds Lost in Switch to Flat Fee
HELENA – In an opinion issued Tuesday, Attorney General Mike McGrath concluded that Montana counties may increase their mill levies to make up for funding they lost when the 2001 Legislature changed the way county revenues are handled.
House Bill 124 required that vehicle registration fees be deposited in the general fund rather than staying in county budgets and directed the Department of Revenue to reimburse counties for these fees.
Lewis and Clark County Attorney Leo Gallagher asked for the opinion when it became apparent that, under the new reimbursement system, counties would receive less in reimbursement from the state for fiscal year 2002 than they had actually collected in property taxes and fees during the previous year.
The opinion notes that this discrepancy resulted from the ‘flat fee’ referendum approved by voters in November last year. The change from property taxes on light motor vehicles to a flat fee registration system went into effect on Jan. 1, 2001, midway through the counties’ fiscal year. However, through HB 124, the Legislature directed the Department of Revenue to calculate the payments to counties as though the new flat fee had been in effect for the entire fiscal year.
“As a result, on average the counties will receive as reimbursements for lost light vehicle fee collections about 88 percent of the revenue they actually received in combined fees and property taxes in FY 2001,” the opinion states.
Since the 2001 Legislature clearly intended that the changes it made in HB 124 remain revenue neutral for the counties, McGrath concluded that local governments throughout Montana can levy sufficient mills to make up the difference.
An attorney general’s opinion carries the weight of law unless a court overturns it or the Legislature modifies the laws involved.