The city and Hill County are both trimming proposed spending to make up for a revenue shorfall.
By Tim Leeds and Ron VandenBoom
Havre and Hill County preliminary budgets for the new fiscal year are available for inspection at the city and county offices.
The Havre City Council gave preliminary approval to $3.69 million in appropriations earlier this week while the County Commissioners have approved a $3.27 million general fund budget.
County Commissioner Doug Kaercher said the county general fund budget proposal reflects an increase of about $90,000 over last year's budget, but figures for last year were not immediately available. Most of the increase, he said, was due to cost-of-living increases for county employees.
Kaercher said the increase reflects the original requests from all county departments. The next part of the budgeting process will be to trim the budget until it matches the revenue the county will receive.
A public hearing on the city budget is scheduled for 7 p.m. Monday in the City Council chambers. The council will vote on the budget that night.
A public hearing period on the Hill County budget is set for 10 a.m. Aug. 15 in the county commissioners' office in the Hill County Courthouse. Another hearing will be held at noon on Aug. 20.
Both Swenson and Kaercher said they are dealing with changes in the way city and county governments are funded due to new legislation and a recent decision by Montana Attorney General Mike McGrath.
House Bill 124 requires vehicle registration fees to be deposited in the state general fund instead of remaining in county budgets. The state Department of Revenue is responsible for reimbursing counties and cities for those fees.
Lewis and Clark County Attorney Leo Gallagher requested an opinion from McGrath after finding that under the reimbursement, counties would get less in fiscal 2002 than in the previous year.
McGrath said a discrepancy resulted from a November referendum that changed how people are charged for registration of cars and light trucks. The referendum established a flat fee that took effect Jan. 1, midway through the counties' fiscal year. The Legislature directed the state Revenue Department to calculate payments to counties as though the new flat fee had been in effect the entire fiscal year. As a result, counties typically would get about 12 percent less money than in fiscal 2001, McGrath said in his opinion.
The Legislature did not intend that counties gain or lose money, he said. Consequently, they can adjust mill levies to make up the difference, McGrath said.
Swenson estimates the impact will mean Havre will receive about $15,000 to $16,000 less, while Kaercher estimates the impact on Hill County's general fund will be about $7,500.
Swenson said the city may have to increase its mill levy somewhat to cover the shortfall, but was not sure what that might mean to individual property owners.
"It will not amount to that much, I don't think," he said.
Even if the city raises taxes to cover the vehicle fee shortfall, the preliminary budget now before the City Council would still have a deficit of about $4,000. But that is a manageable amount to trim from the budget, Swenson said.
Kaercher said the county will probably handle its decrease in vehicle fee revenue by trimming the budget.
The county should have more complete information about the revenue it will receive by Aug. 15, Kaercher said, and until that amount is known it is impossible to say what will be cut.
"We just don't have complete enough information yet," Kaercher said.
Both Kaercher and Swenson are still waiting to see how the new distribution system, which also affects other forms of revenue, will work. They said the new system has made it more complicated to figure annual budgets.
Information from The Associated Press was used in this story.