The Missoula City Council voted Aug. 18 to adopt Mayor Andrea Davis’s proposed Fiscal Year 2026 budget, approving it without amendments. The budget passed with broad support, with only one dissenting vote related to the fee resolutions.

Mayor Davis said the budget represents meaningful progress toward strengthening the City’s financial foundation while keeping property tax impacts minimal for residents.

“In my first City budget last year, I was candid about the challenges we faced—particularly the structural budget deficit I inherited in the City’s general fund,” Davis said. “Since then, our team has worked hard to right the ship. While we still have work to do, I’m proud of the meaningful progress we’ve made.”

The FY26 budget reflects a commitment to disciplined fiscal management. By spending $2.4 million less in Fiscal Year 2025 than originally budgeted and benefiting from stronger-than-expected revenues, the City expects to end last fiscal year with $3.3 million in cash reserves—$1.3 million more than projected. The new budget reduces the City’s structural deficit by 19%, from $3.1 million to $2.5 million.

Lower Tax Burden for Most Homeowners
One of the most notable impacts of this budget is on property taxes. While the budget results in a 3.39% overall increase in City property tax revenues (about $2.4 million), most homeowners will see their bills decrease.

For example, a median-priced Missoula home, assessed at $507,000, will pay $257 less in City property taxes in FY26—a 14.3% reduction from last year. While some higher-value properties will see increases, the majority of residential taxpayers will experience savings.

Investments in Services and Infrastructure
Even as the City improves its financial outlook, the budget makes investments in critical services and infrastructure—often funded through creative means outside of property taxes. Highlights include:

• Continued investment in the City’s Housing and Houselessness Program, supporting housing-focused solutions even as the temporary Johnson Street emergency shelter closes.
• Fair, market-informed wages for Missoula police officers through a newly ratified collective bargaining agreement.
• New street maintenance positions funded entirely through gas tax revenues.
• Infrastructure improvements including the Grant Creek restoration, Animal Control Facility expansion, Orange/Cregg signal project, Scott/Philips Roundabout, and the start of construction on voter-approved Fire Station #6.

Mayor Davis emphasized that while progress has been made, challenges remain: “We are still $1.8 million short of meeting our cash reserve policy, and we must stay focused on eliminating the remaining budget deficit. I am committed to doing so responsibly and thoughtfully—without sudden disruptions to City staff or the essential services our residents rely on.”

The adopted budget, Davis said, reflects Missoula’s values: “This budget is about financial stability, responsible investment, and responsive public service. We’re making steady, meaningful progress—and we’re doing it in a way that reduces the burden on most taxpayers.”