Montana House Speaker introduces $55m infra bill

While there is general agreement among Montana’s political leadership that a major infrastructure spending package is needed, a common ground is lacking on how it should be funded.

Montana House Speaker Austin Knudsen has introduced a new bill calling for $55 million in infrastructure appropriations over the next eight years to help small communities in northeastern Montana cope with growth brought on by the Bakken shale oil production boom.

Knudsen said he introduced House Bill 402 in answer to Governor Steve Bullock's veto of House Bill 218 during the previous legislative session, which would have set aside $35 million to fund critical infrastructure projects in cities like Sidney, Montana, where the speaker said nearly $60 million in immediate infrastructure needs were recently identified.

“House Bill 402 is really my attempt to make good on the governor's broken promise to Sidney and other Bakken communities to help them with impacts. [It] creates an immediate $55 million oil and gas impact account for cities, towns, counties, tribal governments and schools or other local entities impacted by oil and gas development in the state of Montana,” Knudsen said while introducing the bill to the House Appropriations Committee on Monday.

“These entities can apply for grants from this impact fund, which will be administered by the Department of Commerce.”

The $55 million appropriation would be funded in part by allotting 1.75 percent of the state's share of oil production tax into the impact fund, Knudsen said, noting that taxes collected from oil production in the state since 2009 have amounted to roughly $125 million per year.

Several bill proponents testified before the committee, leading Budget Director to the Governor Dan Villa to say he felt like “the loneliest person in the world right now” as the sole individual to oppose the bill at the hearing.

Villa said he did not want to waste the committee's time with a long testimony because the bill will “most likely will not become law,” since Bullock views HB 402 as another “fiscally irresponsible” method to shore up infrastructure needs.

Villa said that while Bullock is acutely aware of the overwhelming need for infrastructure development in the state, he would not approve any legislation that uses what he sees as “inefficient and irresponsible fiscal mechanisms” to do it.

“Put it in bonds and we will be behind you 100 percent of the way,” Villa quoted the governor as saying, adding that he and Bullock believe there is a smarter way to deal with the state's finances and provide needed infrastructure funding at the same time through House Bill 5.

Colloquially known as the Build Montana Act, HB 5 would be funded through creation of state debt through the issuance of general obligation bonds and coal severance tax bonds. 

“Montana will insist on a $300 million ending fund balance. We will not spend more than we take in. And the governor will insist that core essential services are funded before new programs or new tax expenditures are approved,” Villa said. “Those are the three notes that the governor has set down very clearly.”