Local Funding Sources

The major source of public library funding in Montana comes from local property taxes, either through a specific mill levy or an appropriation from general funds. State law allows the governing body of a city or county with an established public library to levy a special tax in the amount necessary to maintain adequate public library service unless an increased mill levy is approved through a vote of the people. The timeline on the next page outlines the steps and timing necessary to pass a mill levy.

Libraries that receive funds from mill levies are eligible to receive prorated money from sources other than property taxes as well, such as ancillary taxes including motor vehicle taxes, oil and gas production taxes, motorcycle fees and so on. State law also allows the governing body of any city or county, or a combination of the city and county, to establish a library depreciation reserve fund. This money can be used to acquire property, make capital improvements and purchase equipment necessary for library services. City or county funds allocated to the library but not spent at the end of the fiscal year can be applied to the library depreciation reserve fund. The Board must request establishment of this fund.

Support for libraries differs considerably among cities and counties in Montana because taxable valuation and the amount levied varies from place to place. Initiative 105, passed by Montana voters in 1986, significantly compounded funding problems for libraries by freezing the level of local property taxes from which public libraries receive most of their funding. A petition and election process is now often required to secure adequate library funding.

The Board can explore local options with the city or county budget officer and should consider reviewing MCA 15-10-420 and 15-10-425 for more information on running a mill levy.