A drop in development and protested taxes are putting a squeeze on Broadwater County's revenue, causing budget cuts.

The $7.6 million draft budget for fiscal year 2008-2009 is down $811,000 from last year's $8.4 million.

The draft county budget goes to public hearing Monday at 11:30 a.m. at the Broadwater County Courthouse and final hearing Sept. 15.

Taxpayers should see the county portion of their property tax bill remain about the same, said Broadwater County Finance Officer Natalie Wenzel.

While this year's mill value of $11,459 is up $400, it's less than half the $823 increase the county was looking at last year.

"New taxable property has declined considerably," said County Commission Chairman Gail Vennes. "The single biggest factor is the decline in new housing development."

The county's slight increase in revenue hasn't kept pace with costs, particularly the jump in fuel prices for both the road and sheriff's departments.

The county is budgeting for just a 2.8 percent cost of living salary increase for county employees, he said.

The county used cost of living adjustment figures provided by the Montana Association of Counties to set salaries, said Wenzel.

Last year, the county gave a 3.2 percent COLA increase.

Due to a 14 percent jump in health insurance premiums, county employees will chip in $30 more per month for health insurance.

Salary negotiations are ongoing with the sheriff's department.

An estimated $900,000 in protested taxes by utility companies is on the books, said Wenzel. Most of this money is revenue owed the schools and county since 2005, she said.

The protests are now entering their fourth year, said Vennes.

The state Department of Revenue is dealing with protests from six companies that pay taxes in Broadwater County -- NorthWestern Transmission Corp., NorthWestern Energy, PacifiCorp, Puget Sound Energy, Qwest Corporation and Verizon Wireless.

Of these, only NorthWestern is close to being settled, said Vennes.

In the coming year, the county must dip into a portion of NorthWestern's protested taxes, to make ends meet, said Wenzel.

If the company's appeal is successful, the county would have to repay the amount it used.

Departments were asked to hold their expenses to last year's levels, despite steep climbs in fuel and utility costs, said Wenzel.

Three employees had their hours trimmed from 40 to 32, but there have been no layoffs.

There are also no new county initiatives or projects in this year's budget.

"We're not able to do anything above and beyond surviving," said Wenzel.

The road department is taking a $47,000 cut because Congress failed to approve the Secure Rural Schools Act, said Wenzel.

Typically SRSA provides $57,000 to the road department.

"That is a major loss of revenue to the road department," Wenzel said.

If Congress approves the funding in October, when it's back in session, the county would amend the road budget.

Reporter Marga Lincoln: 447-4074 or marga.lincoln@helenair.com