Lawmakers ready to prioritize money

HELENA - So far, there are no certain federal stimulus infrastructure projects slated for Flathead County, but there could be once the Montana Legislature plays its part in determining where the money will go.

The American Recovery and Reinvestment Plan ultimately will add an entirely new chore to the Legislature's duties this year. Unlike other states, Montana has Constitutional and statutory requirements for the Legislature to appropriate all federal funding it receives.

During the second half of the legislative session, lawmakers will have a say in prioritizing a good share of about $1 billion in spending, said Clayton Schenck, the state's legislative fiscal analyst.

"It's huge," said Sen. Greg Barkus, R-Kalispell. "I think it will make for an interesting and busy second half."

The process gets under way on Tuesday when the Senate Finance and Claims Committee holds an informational meeting at the Capitol for the public to have input on how stimulus money should be spent.

"The purpose of the meeting is twofold," said Sen. Keith Bales, R-Otter, who chairs the committee. "This is a chance for committee members and the public to learn what's in the stimulus bill and how the money is meant to be used. It's also an opportunity for the committee to get input on how we might spend the money here in Montana, including any state money that's freed up because it can be replaced by federal stimulus funds."

The stimulus package to be funneled through state coffers is complicated, with about $625 million prescribed by Congress to go into more than 60 categories covering broad areas such as education, highways, water and sewer resources and human resources.

And each category has different rules and strings attached to the money.

"It's all over the map," Schenck said. "And that's one of the criticisms about it. There's a lot of different things that it's going to."

Schenck stressed that while the money must be spent in the defined categories, the Legislature will have a role in prioritizing expenditures within those categories.

Beyond the $625 million, the stimulus provides an additional $180 million dedicated to continuing the state's Medicaid program.

Because that amount already was included in Gov. Brian Schweitzer's budget, the federal infusion will free up $180 million over which the Legislature will have complete discretion within the general-fund budget.

Representatives of cities, counties and tribes have been invited to Tuesday's meeting with the Finance and Claims Committee. And they are likely to come with wish lists for local projects.

The city of Kalispell, for instance, has identified a list of seven projects totaling about $138 million. The list includes an expansion of the city's sewage treatment plant, a variety of street maintenance projects, a water-line improvement project, and stormwater drainage improvements - all of which could begin within 60 days, according to city officials.

Timeliness will be an issue for prioritizing most of the stimulus spending, which must be carried out within two years in order to have an impact on the country's ailing economy.

Kalispell's list includes $105 million for the long-awaited U.S. 93 bypass. But that project may not fit the 'shovel-ready" requirements for stimulus funding, because the state has yet to secure right of way from several landowners along the planned bypass route, said Jim Lynch, director of the Montana Department of Transportation.

"We have to have willing landowners to sell right of way to make it work," he said. "And we're not quite there yet."

The Montana Transportation Commission, rather than the Legislature, will rank projects to be funded by about $211 million in stimulus funding that's destined for transportation infrastructure.

Half of that funding must be obligated within the next three months and the rest must be obligated by Feb. 17 of next year, Lynch said.

"What that really told us at DOT is that we need to be doing projects that have already been through the environmental process and most likely the design process," Lynch said.

A list of about $1.5 billion in projects were ranked as potentially qualifying. Phase II projects - including the Kalispell bypass - are the lower priority while Phase I projects are considered the highest priority. A list whittled down to match the $211 million in funding will be presented to the commission at a meeting Wednesday.

The Phase I list so far includes three chip-seal and maintenance projects in the Kalispell area.

Lynch said it's likely that bid-letting for half the transportation stimulus funding will get under way within a couple of months and work will start this summer.

"We've had several meetings with the contracting industry," Lynch said. "They are ready and eager to go to work."

An additional component that could bring the state's overall stimulus funding close to $1 billion involves expanding unemployment insurance benefits.

That component, however, has raised concerns among several Republican governors because some states would have to change laws in order to allow for more people to enroll for unemployment insurance.

Many Montana legislators, Republicans and Democrats, are concerned about that provision and other parts of the stimulus package that could result in an expansion of programs that the general fund would have to pay for once the federal money is spent.

"Our Legislature is very focused on structural balance," Schenck said. "They are really nervous about how some of this money could turn into long-term commitments."

An untold amount of additional stimulus spending will come to Montana through federal agencies such as the U.S. Forest Service, the National Park Service or the U.S. Army Corps of Engineers, Schenck said. And tax-cut provisions in the stimulus bill also will have an economic impact.

Schenck's office has been attempting to account for the overall stimulus impact in forecasting state tax revenues. His office already has revised revenue forecasts several times to assist the Legislature in developing a balanced budget. So far, the forecasts have all reduced expected revenues because of a continuing decline in the economy.

"That's really a shot in the dark, trying to estimate the impact of this thing," Schenck said of stimulus spending and tax cuts. "But we do know it will have an impact."

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com