Whitefish preliminary budget shows tax increase for property owners

Costs for capital improvement projects and personnel are behind an increase in Whitefish’s proposed city budget.  

The total budget for fiscal year 2027 is about $63.4 million, which is an increase over the previous fiscal year budget of $59.6 million.  

The budget includes an increase in expenditures of about $2 million, which is split evenly between capital projects and an increase in personnel services.  

City Council holds its first work session on the budget on May 26 at 5:30 p.m. at City Hall, 418 E. Second St. 

The increase in budget spending is expected to raise property taxes, but the amount will depend on the property’s status. Tax rate changes enacted by the state Legislature have shifted the distribution of taxes among the types of homes in the community, City Manager Dana Meeker points out in her budget memo.  

“Second homes and short-term rentals will experience a substantial increase in property taxes, while primary residences and long-term rentals will experience a modest, inflation-level increase,” Meeker said.  

For primary residential and long-term rentals, the increase for a property valued at $800,000 is expected to be about $32 per year. Second homes and short-term rentals valued at the same amount can expect an increase of about $567 per year in city taxes.  

The increase in capital spending is the result of partially grant-funded park projects that include the Armory Park improvements and the Grouse Mountain tennis court resurfacing project.  

“Amounts on capital projects fluctuate annually as projects change and needs are adjusted to meet demand,” Meeker said. “These increases are offset by a decrease in street projects funded by resort tax as the city accumulates more funds for the next priority street project.”  

Engineering for the replacement of the Stumptown Ice Den roof and the purchase of a quick attack pumper for the Fire Department are expected to require partial financing in the budget.  

In terms of staff, the budget provides most city employees with a 4% pay increase. Police union members will receive an additional 2% increase and fire union members a 5% range increase as a market adjustment, which brings all union members’ wages to market rate based on a 2024 wage study.  

The budget plans for increasing hours for a handful of part-time positions in the Parks and Recreation Department, Municipal Court, and Whitefish Community Library, along with adding a full-time mechanic to service city vehicles.  

Relief from the resort tax will decrease by about $127,000 from the previous year because of a one-time property tax relief that was provided last year because of the payoff of the Haskill Basin Conservation Easement bond.  

The draft budget plans to levy 10 additional mills over the previous fiscal year.  

The increase, Meeker said, is to address “budgetary impacts such as the projected decline in investment earnings, increasing costs for employee wages and employer contributions, new positions to improve services to the community, capital investment, and rising overall operating costs.”  

Deputy Editor Heidi Desch can be reached at 406-758-4421 or hdesch@dailyinterlake.com. If you value local journalism, pledge your support at dailyinterlake.com/support.