How mill levies, taxes and budgets work in the county

Big Horn County Commissioners Deb Craft, Bruce Jolley and Dave Neves, County Clerk Lori Smallwood and County Treasurer Nicole Vigil met recently to explain mill levies, taxes and how the budgeting process works.

MILL LEVY

A mill levy is the property tax rate used by local governments to fund services like schools, libraries, and emergency services. It is calculated as $1 of tax for every $1,000 of a property’s assessed value. One mill equals 1/1,000th of a dollar.

Vigil explained the county gets 12 mills. “Of those 12 mills the county gets, the monies are used for the fair, the treasurer’s office, the library, road and bridge, law enforcement, county maintenance, public health, courts, county attorney, assessor’s office, etc.”   Every time someone pays their taxes, their money goes to the district the property is in.   This ensures that each taxpayer is paying for the services in their own district.  The districts can be a town, schools, rural health care, conservation, fire, senior center, hospitals. (See example for a property not located within a town.)

 Vigil said in the example, only $136.63 total for the year goes to the county.  There is no mill levy designated specifically for the fair. Therefore, monies for county departments including the fair and library comes from the $136.63.

 “It is important when we do motor vehicle taxes that we ask a person where they live and if they live in or out of town. The taxes get distributed by the district just like property taxes. However, it doesn’t get distributed monthly like property taxes do.

All the sales tax on the sale of motor vehicles goes back to the state. The state sends a portion of it back to the county for the general fund.

Craft asked Vigil to explain what happens while the county is waiting for taxes to be paid. Vigil explained that the budget distributions are based on last year’s taxes and revenue. The taxes collected in 2025 will be used to finance the county for 2026-27. This is the fiscally responsible way to budget the county funds, Vigil said.  Some counties don’t do it that way and have to “borrow” money from the reserves to pay out the distributions.

Some of the criticism directed at the commission about the fair and the library comes from a post on social media. The post shows the county fair general taxation is $267,813.09. The county library taxation shows as $380,000.  Unfortunately, when reviewing the 2025-2026 budget adoption resolutions an error was found in the section quoted by the post. That resolution has been corrected and is posted on the county’s website along with the original.

Smallwood gave an overview of the budgeting documents used to determine the total county budget. For the 2025-2026 fiscal year. Smallwood explained that all fair expenses and revenue are processed through the 60 fund. In this particular year, that fund started off $93,932 in the red. The projected revenue for the fair was $115,000, which would leave a positive balance in the fund of $21,067. “If you add up their budget need and subtract the projected positive balance in the fund that totals a need for funds of $211,811. The county funds that need from the 12 mill generated by property tax. In an effort to ensure the county doesn’t spend more than it has, we use a 3% shrinkage factor to account for taxes that aren’t paid or other drops in revenue that may occur. When you take fair funding needs of $211,811 and apply a 3% shrinkage, that total is $217,533 subtract the anticipated balance in the fund of $21,067 and the total tax revenue we need to earmark is $196,465. This is a process and formula we have used for decades that keeps the county from spending more than we have.”

In the case of the library, the estimated total requirement for appropriations is $288,400 for 2025-2026 to ensure the county has enough to issue their check for $280,000. Smallwood  said the county puts these numbers in the notice of hearing on the county budget to keep track of what percentage of the mil money goes to those two entities, not because they have a set mill distribution like the schools and special districts, but to make sure, the county does not overspend in all the other areas and not leave any money for all areas funded through the 12-mil funding. Vigil said the library oversees how they spend their money. She writes them one check for the entire year.

Smallwood continued that it is possible for any department to have raised enough revenue so that zero funding needs to come out of the mill levy but this isn’t likely. “Because we always have to pull out of our general fund to cover the fair and the library, I leave those numbers in, so I know that I’m not over budgeting what our tax money will bring in. We budget on a cash basis.”

Vigil added this is a very fiscal responsible way to budget. “We are not taking numbers out of the sky.”

REVENUE FROM DEPARTMENTS

Vigil pointed out that many departments in the county bring in revenue, including the detention center, fair, district court, clerk’s and treasurer’s office (through motor vehicle taxes/license plates). Whether it comes from the U.S. marshals for inmates or from the fair as advertising/sponsorship, ticket sales, gate fees, it is required to be listed as revenue. This revenue does not offset the expenses of that department.

In the fair’s case, when the money comes in, it is first put in the fair account (60 Fund) so there is an accounting of all funds generated. Then it goes back to the general fund.

Vigil clarified that, in the case of the fair, if an event/donation is specifically designated for a project, that money is put in a separate line item. That money stays with the project. Cases in point: the Winter Festival and Squeal Your Thirst fundraisers for the pig barn. When the pig barn was purchased and installed, all the money from those fundraisers helped pay the expense of the barn and panels. The rest of the expense was paid by the county utilizing one-time federal COVID relief funding.  

Vigil noted that donations are rare and typically are for specific capital improvements like the pig barn and multipurpose building (indoor arena).

Those types of donations can be made but because they are specific, they will not be included or mixed with fair income.  More typical is a sponsorship for the fair itself. This includes advertising in the fair book, banners, etc. Those types of sponsorships go toward the expense of the fair such as the fair book, ribbons, awards, events and judges.  Any additional expense comes from the general fund.  Sometimes businesses do “add-ons” for the Junior Livestock Sale. That money goes through the livestock committee and is added onto the payout to the sellers.

WHAT HAPPENS IF A DEPARTMENT IS UNDER BUDGET

Vigil said if any department comes in under budget, that department doesn’t get to keep the money for the next year’s budget.  “Everyone had to cut their budget. I went through and cut. Then when a staff member left, I lost that money for my budget too.  Did I get her salary paid to my department so I could use it later? No.”

Jolley stated that the detention center is the only department that brings in a significant amount of money.  This money also goes back to the general fund.

DESIGNATED MONEY MUST STAY WHERE DESIGNATED

Another topic discussed on social media was the amount of money that comes into the county. A large portion of those monies are federal and state funds that can’t be moved around. If the grant is for airports, then it must be used for airports. Other examples include Safe Routes to School and E-911 funds. The E-911 funds have paid for upgrades for the dispatch center, text to 911 and emergency response. Without those designated fee funds, the county’s general fund would not have been able to pay for such critical and reoccurring upgrades to emergency response infrastructure and technology.

Jolley said he has had some people tell him that the county should spend less on roads. “If we cut our road budget in half and only fix half of the roads, in five years, how will you ever catch up? They keep deteriorating.” 

UNFUNDED MANDATES

The county is left holding the cost of unfunded mandates that come from the state and federal government. Neves said courtroom security for the circuit and district court is one of those. The county will have to pay most of the security costs and upgrades. 

Recent changes in Wyoming Highway Patrol have also pushed county resources requiring sheriff deputies to respond to calls that would normally be handled by WHP. These responses not only cost wage time but add to fuel and vehicle maintenance expenses. 

Recent election legislation resulted in additional election and election judge expenses that is the responsibility of the county with no additional legislative or  state funding appropriated for those expenses. 

Craft added that there are many services the county provides above and beyond the statutory duties of county government. “We continue to try and fund because they are important to our citizens and play important roles in the health, wellbeing and livability of our communities.”

DIRECT DISTRIBUTION/PAYMENT IN LIEU OF TAXES

Another key component to county funding is direct distribution which comes from the state and is funded by statewide sales tax revenue.  This revenue is distributed by a statutory formula to each county and town in the state. This funding in 2025-2026 will equal $976,029 and has restrictions prohibiting use for employee salary adjustments, increased personnel or benefits. 

Due to recent changes to this formula, projected direct distribution funding for 2026-2027 is $987,238.  The federal government also issues funding to some counties in the form of payment in lieu of taxes (PILT).

These funds are paid to Big Horn County to partially offset property taxes that the county could receive if federally owned public lands were owned by citizens who would pay associated property tax. PILT funding is subject to federal budgeting and is never a guaranteed amount or income source. In 2025-2026, PILT payments totaled $1,543,947 but are projected to drop to $1,080,749 in 2026-2027. Smallwood noted that the money the county needs to physically operate keeps dwindling. If it weren’t for grants from the federal government, State Land & Investment Board and other sources, counties like Big Horn could not function. 

All the financial information about the county’s budget and resolutions are available on the county website.