MTPR

Montana Republicans Propose Cap On Borrowing For Big State Projects

Jan 23, 2019

In first weeks of the legislative session Gov. Steve Bullock and the Republican Majority are trading barbs over how the state should pay for big public projects, including university system improvements and maintenance in towns and counties.

On Wednesday GOP leaders revealed plans for a new system for how Montana borrows money for public works projects.

That’s a change from 2017, when powerful Republicans shot down the idea of borrowing for public works at all, in the face of a state revenue shortfall.

But that doesn’t mean Senate Majority Leader Fred Thomas is happy with the Bullock administration’s infrastructure proposal, which includes roughly $160 million in borrowing.

Senate Majority Leader Fred Thomas (R) SD44.
Credit Mike Albans / Montana Public Radio

“It seems like every session, the last three particularly, the governor, he will propose some aggressive infrastructure bill that's kind of a mile too far or a wall too high.”

Thomas says Republicans are working on their own proposal.

“And that doesn’t mean that we can’t look at projects this year. I think we will, but it will be based upon this formula that we come up with,” Thomas says.

The details of the Republican “formula” are unclear. But it appears to include an adjustable cap for how much money the state can borrow when paying for public works projects.

Republican Representative Eric Moore is among the group of his party’s lawmakers working on the bonding cap proposal.

"I think it’s going to give the Legislature more assurance that we’re not just shooting in the dark," Moore says. "We’re going to set a target that most Montanans can agree on as a reasonable amount of debt. Because at the end of the day, debt isn’t good or evil in of itself.”  

He says the idea is to set Montana’s borrowing limit before each legislative session, using a variety of financial metrics. Those include the ratio of how much the state owes to how many assets it has, and the amount of revenue coming into the state.

Moore says this could ease the worry about what is a financially reasonable mix of cash and bonds to pay for public construction projects.

It could be several weeks before the idea moves onto the House floor.

“We know what we want to do at 30,000 feet, but there’s a lot of details that we've got to drill down into yet,” Moore says.

Republican Senate Majority leader Fred Thomas is framing this as a bipartisan solution to the state’s future infrastructure needs.

Democratic Representative Ryan Lynch is carrying the governor’s public works bill.

Rep. Ryan Lynch (D) - HD76
Credit Montana Legislature

"It is a conversation. We’re excited about the conversation and applaud the efforts to have the long-term conversation, but realizing that there are immediate needs within the state. We want to make sure that is a part of the long-term conversation as well," Lynch says.

The Governor’s Office sent out a press release this week calling on the Legislature to pass Bullock’s bill and help him “put shovels to dirt.”

According to a report card issued in December by the American Society of Civil Engineers, much of the state’s infrastructure is old and outdated.

In three of the last four regular legislative sessions, lawmakers were unable to agree on how or if the state should borrow money to pay for a package of public works projects. Governor Steve Bullock vetoed the plan in 2013.

The hangups year-to-year include some conservative lawmakers' disagreement with the kinds of projects Governor Bullock has called critical infrastructure, like $32 million to rennovate Romney Hall at Montana State University.

MSU officials say Romney, a physical education building built in 1922 is obsolete and needs to be renovated to fit MSU’s growing enrollment.

Clayton Christian, the Commissioner of Higher Education, spoke to a committee of lawmakers about the  project Wednesday. 

“They’re not projects that we want. They’re projects that we need to serve students in Montana,” he said.

The governor’s proposal also includes another $32 million for a new Montana Heritage Center in Helena. Tens of millions in additional bonds are also outlined for grants to local government projects. 

Although some Republicans are open to approving a big project like Romney Hall, the state constitution requires a supermajority of lawmakers to approve any bonding projects. This high threshold to approve large scale work is another hurdle that’s prevented work moving forward.