Eighth elementary school

Construction crews work on building the gymnasium of the Bozeman’s eighth elementary school on Durston Road in Bozeman, on Dec. 4, 2012.

Growth, for the Bozeman area, hasn’t come cheap.

As the population of the Gallatin Valley has swelled, with population inside city limits alone climbing from 30,869 people to 41,660 between 2004 and 2015, local governments have spent millions upon millions on public facilities, trying to keep up.

A new, 160-bed county jail that opened in 2011, with a $37 million price tag. A $38 million high school renovation, finished in 2010. A $17 million city library in 2006, and a $15 million parks bond authorized in 2012 — just to name a few.

And that’s even before projects to build a second high school and a new police and courts facility, both likely to head before voters in the coming year, and each likely to cost somewhere between $50 and $100 million.

Between those projects and other costs tied to growth — expenses like extra police officers and teachers, as well as new services like buses and affordable housing efforts expected by Bozeman’s increasingly urban populace — local government budgets are on the rise, pushing property taxes upward with them.

And with the city and school district bumping up against property tax limits set by the Montana Legislature, city officials in particular are starting to worry about asking too much of Bozeman’s property owners, arguing it’s time to consider alternative revenue streams like gas and sales taxes that would spread costs to commuters and tourists.

All three of Bozeman’s local government entities — the city, Bozeman School District and Gallatin County — have seen their budgets swing upward over the past dozen years. Not counting programs like utilities that are theoretically managed without subsidy from tax dollars, each saw spending climb by at least $10 million between 2004 and 2015.

City of Bozeman

Per-resident revenues and spending, inflation-adjusted in 2015 dollars



Annual city spending, excluding fee-funded utilities like water and sewer, grew by more than $14.1 million to $45.8 million between 2004 and 2015 — even adjusted for inflation.

For Bozeman schools, comparable spending numbers were up $31 million over the same period, to $78 million. And even Gallatin County government, with its reputation for penny pinching, saw the cost of programs rise $10.6 million, to $49.3 million.

Population growth has seen the city’s tax base increase, distributing the impact of higher budgets across more homeowners and businesses. According to city financial records, for example, its property tax collections were spread between $87.9 million in taxable property value in 2015, approaching double the 2004 valuation of $49.6 million.

But, even so, most Bozeman homeowners are seeing heftier tax bills, according to a Chronicle analysis of data provided by the county treasurer’s office.

Three quarters of the city’s 12,400 residential property owners were taxed more in 2015 than 2010, according to that data — with a median tax bill increase of $308 over that five-year period.

‘Necessary, but at what cost?’

Jim and Suzanne Bratsky have lived in their modest home on Bozeman’s south side, a few blocks from Morning Star Elementary School, since the 1980s. Valued at $251,700 by state assessors, their property is smack dab in the middle of the spectrum for Bozeman’s residences.

While the assessed value of the home has doubled since 2010, according to county data, the portion of that value considered taxable, $3,398, is actually down $121 over the past five years. But, with local tax rates up, the family’s annual tax bill has grown by $246.26, to $2,379.32.

That increase, averaging 2.2 percent a year, is only modestly higher than inflation — and, so far, Jim Bratsky said, manageable. But he added that he’s expecting a bigger increase if the law and justice and second high school projects go through.

He said he’s generally satisfied with how local governments manage their finances, and sees the value in spending on things like public facilities and street maintenance. But, he added, he’s not sure whether he’ll support additional levies, noting he’s worried about taxes pushing middle income families outside city limits.

“I don’t know how long the community will support those things,” he said. “I think they’re probably necessary, but at what cost?”

“I came from a really poor family,” said Bratsky, a veteran who retired from a job in MSU’s IT department. “I would like to support education, because that’s how I got out of that.

“Sometimes,” he added, “you just have to say you can’t afford it.”

The impact of more

City assessments, not technically property taxes but also revenues collected from property owners, are also up for the Bratskys — with their $155 assessment bill in 2015 a $48 increase over 2010. And city budgets approved for 2016 and proposed for 2017 also include hefty assessment increases, together estimated at $82 a year for typical properties.

Included in those numbers are increases for street maintenance, tree upkeep and completing the city street network in growing portions of town.

According to an initial estimate provided by school district staff, a $50 million high school would add roughly $95 to the annual tax bill for a family like the Bratskys, and a $100 million project would cost an additional $189 a year.

The impact of the law and justice center project is harder to estimate because the project cost would be split between the city and county tax bases, meaning city taxpayers would be taxed for both city and county portions of the project.

In terms of monthly payments, $500 extra in annual taxes translates into an additional $42 a month in housing costs.

In comparison, paying $100,000 more to buy a house — the increase in median Bozeman home price reported by the Gallatin Association of Realtors between 2010 and 2015 — adds $477 a month to mortgage payments, assuming a 4 percent interest rate and 30-year loan.

‘Catching up’

City government does try to recapture much of the infrastructure cost made necessary by new development, requiring things like local street construction as a condition of subdivision approval and charging impact fees to cover expanding intersections and sewer lines.

But those fees, subject to some controversy and strict statutory limits on their use, don’t end up covering everything — which spurred city commissioners to create a new assessment to fund arterial street construction last year. And, though funded by utility bills instead of taxes, the city has also spent hundreds of millions on expanding its water and sewage treatment plants.

“Growth doesn’t totally pay for itself,” said Bozeman Mayor Carson Taylor. “We’re catching up on things at this point, and that’s why taxes are going up.”

Amounts assessed on property owners for street maintenance are also on the rise as the city tries to catch up on overdue repairs in older parts of town — something city officials say is a need not so much because of growth but because too little has been spent on street upkeep in the past.

City Manager Chris Kukulski also said that city spending is rising as residents expect additional services like sustainability, economic development and housing affordability efforts — and as services like city police and streets are used by growing numbers of commuters and tourists.

“We’re a regional trade center, we’re a tourist attraction,” he said, adding he’d like to see the state Legislature let the city consider revenue streams like gas and sales taxes so residents aren’t the only ones on the hook for city services.

“If affordability is one of our highest priorities, and it unequivocally is, then who’s paying for the services?” he said.

Gallatin County

Per-resident revenues and spending, inflation-adjusted in 2015 dollars



Kukulski and Taylor also pointed to voter-approved tax increases like the 2007 public safety levy to add staff to the police and fire departments and the 2012 trails, open spaces and parks bond, which authorized $15 million in bonding to pay for new major parks.

The city, Taylor said, had been relying on private developers and nonprofits like the Gallatin Valley Land Trust to build new parks as it grew, he said, meaning it wasn’t seeing newer sections of town built with large-scale parks like Lindley Park off East Main Street.

“We weren’t getting any of the big parks out in other sections of town,” he said. “We needed to keep up with that and we didn’t. And now we’re catching up.”

Taylor echoed Kukulski’s desire to see the state Legislature give the city access to additional revenue tools like sales and gas taxes, saying they could allow some property tax relief.

“We could provide services to the public that are not so reliant on property ownership,” he said.

‘All that stuff costs money’

For local schools, enrollment growth — 5,086 to 6,326 students between 2004 and 2015 — has driven a steady stream of bond-financed school projects, totaling more than $140 million.

Included in that total are construction costs for Chief Joseph Middle School, Meadowlark Elementary and Hyalite Elementary, as well as the cost of buying land for a second high school and expanding Bozeman High, Sacagawea Middle School and Longfellow and Hawthorne elementary schools.

Bozeman School District

Per-student revenues and spending, inflation-adjusted in 2015 dollars



“We’ve been able to keep up pretty well, because of the support that we have,” said Deputy Superintendent of Operations Steve Johnson.

Per-student school spending has gone up, he said, largely because of debt service on the construction projects, but also because of growth in costs like special education and software to meet federal testing requirements.

The district has also tried to keep teacher salaries and benefits up with inflation, he said.

“All of that stuff costs money,” he said.

Like the city, Bozeman schools — who don’t assess impact fees — are pushing up against a state-mandated cap on property tax levels, meaning operational costs for a second high school could crimp its existing budget.

“We can’t ask the taxpayers for any more as far as our operating costs go,” Johnson said. “We’re at a point where we have to live within our budget restraints.

“Property taxes are the primary funding source for schools,” Johnson said. “It is the system that we have.

“Until the Legislature changes that,” he said, “we don’t have any other means of raising that revenue.”

Eric Dietrich can be reached at 406-582-2628 or edietrich@dailychronicle.com. He is on Twitter at @eidietrich.

Growth and government spending in Bozeman

Change in Bozeman-area local government revenues and spending with growth. Numbers from annual financial reports, inflation-adjusted to 2015 dollars.

Category 2004 2015
Bozeman population 30869 41660
Bozeman tax base $49.6 million $87.9 million
City revenues, total $31.0 million $45.1 million
City revenues, per resident $1,002 $1,083
City spending, total $31.7 million $45.8 million
City spending, per-resident $1,027 $1,099
School revenues, total $46.5 million $75.7 million
School revenues, per-student $9,150 $11,968
School spending, total $47.0 million $78.0 million
School spending, per-student $9,236 $12,334
County revenues, total $36.0 million $54.8 million
County revenues, per-resident $464 $563
County spending, total $38.8 million $49.4 million
County spending, per-resident $500 $507


Eric Dietrich covers city government and health for the Chronicle.

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