MTPR

Governor, GOP Propose Starkly Different Borrowing Plans

Mar 12, 2019

A new proposal from House Republicans is calling for a scaled down version of Gov. Steve Bullock’s plan for the state to borrow money for public works projects.

Bullock’s infrastructure plan released early in the session called for $160 million in state bonding.

That money would fund $44 million in local assistance grants. It would also and pay for additional water and wastewater grants through the treasure state endowment program, funded through coal severance tax.

Montana has a backlog of more than $2 billion worth of public works projects, according to Darryl James, the executive director of the Montana Infrastructure Coalition. The Coalition is a broad group that includes local government leaders and the construction industry.

James spoke in support of Bullock’s proposal in House Bill 14 during its hearing in House Appropriations, Tuesday.

“The largest part of that is really at the local level -- it’s roads, bridges, water, sewer, stormwater, even K-12 schools.”

He called Bullock’s proposal the beginning of the infrastructure conversation, pointing out the large amount of funding it outlines for larger state-owned projects.

Bullock is requesting more than $64 million in new state debt to pay for a new Montana Heritage Center and the renovation of Romney Hall at Montana State University, in Bozeman.

Montana Historical Society Director Bruce Whittenberg told lawmakers Tuesday that the historical society has been waiting to build the new museum since 2005. That’s when the state Legislature gave initial funding approval.

“My hope is this is that this is the session that finally quits kicking this can down the road.”

The Republican infrastructure counteroffer, which gets its first hearing Wednesday, does not include the museum. That’s the largest single project disagreement between Gov. Bullock and Republicans’ offers.

Their HB 652 proposes $80 million in bonding, or half of the governor’s request. 

“We’re building this new structure, fiscal framework, including best practices from around the states and our own state," says Missoula GOP Rep. Mike Hopkins. "We’re also trying to clean up some of the backlog.”

The list of projects Republicans are willing to bond for fits into a new policy that fundamentally shifts when and how the state pays for infrastructure. That separate bill, HB 553, is awaiting action in the Senate following its unanimous approval in the House.

It sets a new limit on state debt, based on how much debt the state is already carrying and the incoming revenue available to pay it off.

That new framework, Hopkins says, limits the amount of bonding the Legislature could move forward with this session.

The Republican list agrees to fund several major capital projects the governor calls for, like the long fought over Romney Hall at Montana State University in Bozeman.

However, unlike in Bullock’s proposal, the Republican plan requires MSU to raise $7 million in private dollars to pay for the project, reducing the state’s contribution.

And like the governor calls for, the Republican bill also sets up local assistance grants for infrastructure projects, although it funds at $14 million rather than the governor’s proposed $44 million.

Republicans have also targeted different areas for the grants, focusing on locations impacted by natural resources development.

Unlike most legislation, creating state debt to pay for infrastructure or anything else, requires a two-thirds vote by lawmakers. The high bar has tripped up proposals in recent years as some conservative Republicans have opposed using debt to pay for certain public works projects.

The Legislature has failed to pass a bonding package to fund major infrastructure needs across the state in three out of the last four regular legislative sessions. One year, Bullock vetoed the plan over budget concerns.