Frontier Institute’s newest Real Local Budgets report — personally, one of my favorite reports we put out each year — compares budget growth for major cities and counties over the last decade to population growth plus inflation, a benchmark metric for fiscally conservative budgeting. The report once again finds most major Montana local governments have continued a massive spending spree, burdening taxpayers with millions in excessive spending since FY 2015.
More Government Means More Taxes
More Government Means More Taxes
"Limiting governments' budget growth, or even reducing budgets as many families have done when faced with rising costs, will provide more opportunities for tax relief."
Why is Flathead County delivering on-going property tax relief for their taxpayers in the 2025 fiscal year while other major local governments are busy this summer proposing tax hikes? One obvious reason is that Flathead County, unlike most other major local governments in Montana, has diligently held the line on new spending to protect taxpayers and passed fiscally conservative budgets for the last decade.
According to Federal Reserve Economic Data, Montana’s population growth plus inflation grew 47.8% between FY 2015 and FY 2024. Montana leaders have said the rate of population growth plus inflation is a benchmark for conservative budgeting because population growth indicates the demand for government services and inflation measures the cost to provide services. If the growth of spending in the budget does not exceed this trend, then leaders can be reasonably confident that the cost of government is staying within the bounds of the taxpayer’s ability to pay for it.
Below are this year’s results for city spending growth compared to the rate of population growth plus inflation between FY 2015 and FY 2024. Kalispell and Bozeman are the biggest spenders of the cities measured, while Billings is the only city that held their FY 24 budget expenditures under decade trend for population growth plus inflation.
- Kalispell: +161.6%
- Bozeman: +140.9%
- Hamilton: +84.1%
- Missoula: +29.5%
- Helena: +14.7%
- Great Falls: +5.0%
- Billings: -11.9%
And below are the results for county spending growth compared to population growth plus inflation for the same period. Missoula County ranks as the top spender while Cascade, Flathead, Butte-Silver Bow held their budgets significantly below the decade population growth plus inflation trend.
- Missoula: +107.4%
- Gallatin: +76.9%
- Ravalli: +58.8.6%
- Yellowstone: +21.5%
- Lewis & Clark: +15.9%
- Cascade: -4.6%
- Flathead: -23.9%
- Butte-Silver Bow: -41.7%
The impact of these budget trends speak for themselves. We are generally seeing governments with fiscally conservative spending growth like Billings, Flathead County and Butte-Silver Bow keeping property taxes flat or even providing tax relief, while big spending governments like Bozeman, Kalispell, and Missoula for example are proposing sizable property tax hikes.
Some local officials have been salty in the past about Frontier Institute’s Real Local Budget Report, arguing the calculations don’t fairly represent the growth of their budgets. This year we went to great lengths to improve accuracy by utilizing the Legislative Fiscal Division’s comprehensive methodology to track local government budgets while addressing issues that can cause expenditures to appear larger than if simply summed up such as transfers and internal service funds.
Note that the budget totals in the report do include one-time-only federal funding, and for good reason. This year many school districts learned the hard way that federal money isn’t free, and can be spent on ongoing priorities that later will need to be paid for by property taxes.
Remember, the root cause of taxation is always government spending. All government spending — federal, state, school, or local — must eventually be paid for by the taxpayer, whether in the form of higher taxes, “non-tax” special assessments, fees, or some other more creative burden. Limiting governments’ budget growth, or even reducing budgets as many families have done when faced with rising costs, will provide more opportunities for tax relief.
Read the full report at frontierinstitute.org/2025realbudgets.
This article first appeared in Lee Newspapers.