A new computer software program being installed by the state of Montana’s Department of Revenue (DOR) could cost county taxpayers a lot of money and transfer local control of tax collection to the state.
If the state implements its plan for a second phase of its $32 million sophisticated hardware and software upgrade—referred to as POINTS II—the program will take over all tax collection in the state. Billing and collecting taxes is now—by law—the duty of county treasurers. Many county treasurers view the plan with concern and alarm.
“Everything I’ve heard is that the DOR is going forward with plans to take over doing many of the duties of county treasurers,” says Missoula County Treasurer Vicki Zeier. “There’s a real fear that they would do away with county treasurers. I think citizens expect and need a high level of local service. We’re not doing them justice if we move it out of the area.”
Zeier says most county treasurers oppose the proposal and the state has not made any final demands yet. At this point, Zeier thinks it will be optional to the counties on a voluntary basis and it may be attractive to some eastern Montana counties with extremely small populations.
The major problem after loss of service, critics say, is the loss of revenue to the counties that now collect taxes. As money comes in, the funds are deposited in interest-bearing accounts. Disbursements are made to state agencies on a once-a-month basis. But the interest earned on the funds remains in the county and is credited to the account in which the funds were placed.
In Missoula County, where the annual budget is more than $60 million, the interest collected on various taxes is more than $1.5 million, and that money results in direct savings to taxpayers, according to County Budget Administrator Jane Ellis.
“If the state takes over the tax-collection functions, the main question we have is how much of that interest would we see, if any,” Ellis says. “That issue hasn’t been addressed. This isn’t very important to the average citizen yet, but it will be if he has to pay more county taxes because of centralization of collection.”
Zeier says her office deals with complicated tax questions on a daily basis and continued local service is the strongest argument against the DOR’s proposal. “Many of our older citizens feel a need to walk in and talk to us and pay taxes in person. Sometimes there are mistakes to correct or adjustments to make,” she says. “If POINTS II goes through, those folks would have to go to Helena to have those concerns addressed.”
In Ravalli County, which has a $14 million budget, the interest returned to the general fund is $444,379 annually. Other trust and agency accounts, such as fire, water and school districts, receive an additional $213,211 in tax interest, according to head bookkeeper Pat West. Ravalli County Treasurer Mary Kay Browning was at a business meeting in Bozeman last week and could not be reached for comment. However, staff members said she is following the POINTS II discussion and is opposed to any centralization efforts.
Several years ago, the state took over the functions of county assessors. County assessors, who had been elected officials, were given the opportunity to become state employees or retire. State employees, operating out of offices in each county, now do all tax assessment. But, the billing and collecting of taxes is still a function of the county treasurer.
As funds come in, they are rolled over within a day into various interest-bearing accounts which make for a county investment pool. That pool draws interest on the money until disbursements are made on the 25th of each month to the state, the school districts and any other entitled agencies.
Many treasurers around the state see the POINTS II program as encroachment by the state on local government. The programs are sophisticated enough to take over many other local functions.
“There’s been talk that the state could do away with county clerks and recorders and do it all from Helena too,” says Ravalli County Clerk and Recorder Betty Lund. “I’d hate to tell people who use this office every day that they have to go to Helena to take care of their business.”
Zeier and Lund both believe a local office with trained staff available to provide needed services is essential. If that is the case, the offices should remain county, not state, entities.
At a recent meeting of the Montana Association of Counties in Great Falls, DOR Director Mary Bryson tried to assure county officials that POINTS II was not a “hostile takeover bid” by the state. Most were openly skeptical.
“We look at what happened to the assessors,” says Lund, “and we wonder if we are next. They keep saying nothing will change, for now. But what about later? It’s a real concern.”