Infrastructure takes center stage in Helena

Editor’s note: This article is the third in a series previewing some of the issues facing the 2017 Montana Legislature. Legislators convene Jan. 2 in Helena.

By SAM WILSON

Daily Inter Lake

Despite the tight fiscal outlook as Montana’s legislators prepare to enter a budget-focused session next month, a spending package to address infrastructure needs throughout the state is once again a top priority on both sides of the aisle.

Democrats and Republicans say the state should play a role in addressing deteriorating roads, bridges and sewer and water infrastructure throughout Montana. As in the 2015 session, however, the two caucuses are already posturing for an infrastructure debate that will center around what types of projects get funded, and where that money comes from.

The divisions date back to the 2013 Legislature, which passed a $35 million infrastructure bill to bail out cities in towns in Eastern Montana, which were then in the midst of an overwhelming oil boom. Democratic Gov. Steve Bullock ultimately vetoed the bill, arguing that it left too little cash in the state’s budget surplus.

Infrastructure was again one of the flash points during the last session, which was extended as lawmakers attempted to hash out a compromise between the Governor’s Office and the GOP-controlled House and Senate.

Bullock and the Democrats had pushed for an infrastructure spending bill funded both by state cash reserves and general-obligation bonds. Many Republicans argued that the state should not assume debts through bonding when the two-year budget already contained a projected surplus of more than $300 million, and objected to the inclusion of building projects that went beyond their focus on roads, bridges and sewer and water infrastructure needs.

A final, $150 million infrastructure bill passed the Senate by the two-thirds vote required for bills financed by bonding, but was blocked by a single vote in the House.

BULLOCK’S PROPOSED budget for the next two years includes $293 million in infrastructure spending, of which $157 million would be paid for by bonding. Many Republican lawmakers have called the proposal untenable, however, and pledge to hold the line on bonding.

Bigfork Sen. Bob Keenan, who was elected Senate President Pro Tem during the Republican caucus in November, said he expects to continue in his role as one of the Senate’s main budget negotiators during the 2015 session. In an interview, he accused Bullock of proposing a “smoke-and-mirrors budget” that covers up over-spending by borrowing money for infrastructure spending and other programs.

“The governor is taking a Democratic icon of the Coal Tax Trust Fund, he is taking the Treasure State Endowment Program and he’s putting it into the general fund to balance the budget,” he said. “And he’s bonding what programs would receive that Treasure State Endowment money normally.”

The Daily Inter Lake’s repeated requests for comment from the governor were unsuccessful, but in an interview with Montana Public Radio last week, Bullock characterized his budget proposal as “a starting point.”

Many of Keenan’s Republican colleagues have also criticized Bullock’s inclusion of expensive building projects he insisted on funding within last year’s infrastructure bills, including a $27 million state museum in Helena and $28 million in renovations to Montana State University’s Romney Hall in Bozeman.

Sen. Mark Blasdel, R-Kalispell, is the incoming Senate Taxation Committee chair. Speaking during a Kalispell Chamber of Commerce lunch meeting last month, he denounced the inclusion of those projects and accused the governor of using the budget proposal as a political stunt “full of potholes and a lot of gimmicks.”

Democrats in the Legislature argue that those building projects are an effort to also benefit the state’s urban areas, however, which have larger tax bases and where infrastructure investments are more frequent. Montana’s larger cities have already funded many of those needs, said House Minority Leader Jenny Eck, D-Helena, and wouldn’t see as many benefits from a strict roads-and-bridges infrastructure package.

“I think we need to build an infrastructure package that is reflective of the needs of all our communities,” she said in an interview. “Nobody won by killing that bill last session. [Bullock’s proposal], the bill that’s being looked at, does provide significant support for rural communities.”

STILL, BLASDEL and other Republicans have said the Legislature will pursue a narrower definition of infrastructure this session, a strategy endorsed by the Montana Infrastructure Coalition, which formed following the Legislature’s failure to pass the spending bill last year.

“You have to take a step back and say, ‘What do you bite off first? What is critical to every single community in Montana?’” coalition Executive Director Darryl James said. “You start with those basic-level needs.”

James also stressed the importance of a long-term solution for maintaining the state’s roads, bridges, and water infrastructure, rather than fighting over one-time funding packages every two years. He said the infrastructure coalition, which represents about 90 municipalities, counties, businesses and organizations throughout the state, has crafted a package of legislation that will provide funding tools and sustainable grant programs to benefit local governments across Montana.

The proposal includes a narrow local-option sales tax to fund infrastructure, designed to capture spending by visitors to tourism-heavy cities and towns while avoiding taxes on purchases by locals. As the state’s gas tax already diverts more money to rural areas with less tourism activity, he added that the coalition is proposing a 10-cent increase to address their needs.

The coalition’s legislative package also includes two bills that would incentivize privately funded infrastructure projects and diverting money from two of the four funds within the Coal Tax Trust Fund to create an infrastructure bonding authority for local governments.

“I’d say we’ve built a coalition of bipartisan membership ... and built what we believe is a palatable plan based on that membership,” James said.

And while several Republicans have commended the efforts of the infrastructure group, its preference to use bonding to pay for the state’s immediate needs could see pushback from the GOP.

As the incoming House Appropriations Committee Vice-Chairman, Rep. Randy Brodehl of Kalispell will have considerable influence over the fate of the 2018-19 biennial budget. Brodehl helped defeat the final infrastructure bill to emerge during the 2015 session, and vowed to oppose any measure that seeks to borrow money for public works projects.

“There isn’t any level of bonding that you’re going to see me vote ‘yes’ on,” Brodehl said. “What I saw last session is, we didn’t pass bonding, and that tells me there is a strong vote out there to not approve bonding of things like facilities.”

James thinks the conversation could be different this time around.

“That discussion is all but irrelevant this session, because there is no cash, so we have to have an intelligent discussion about the appropriate use of bonding,” he said.

Rep. Mike Cuffe, R-Eureka, will chair the Joint Appropriations Subcommittee on Long-Range Planning, which will review much of the infrastructure spending included in the next budget. A consistent member of his caucus’ conservative wing on major votes in 2015, Cuffe was one of the 25 Republicans to vote in favor of the final infrastructure compromise at the end of the session.

While offering plenty of critiques of Bullock’s proposed budget, Cuffe also expressed optimism that a successful spending package will finally emerge from the 2017 session.

“My sense is a lot of us want something done, and we are hoping that the governor will work with us to do these things,” Cuffe said. “I think this is going to be a really basic, nuts-and-bolts kind of a session, and that’s a good thing when money is short.”

Reporter Sam Wilson can be reached at 758-4407 or by email at swilson@dailyinterlake.com.