By Martin Kidston
The Montana Infrastructure Coalition has turned its attention to the 2017 Legislature by paring down a list of infrastructure needs and exploring ways to generate revenue to pay for state projects.
With the Montana Department of Transportation projecting a $27 million deficit for the coming year, and with state leaders locked in a stalemate on how to fund those needs, the coalition is searching for creative ways to solve what its members see as a mounting crisis.
“MDOT is projecting a $27 million shortfall in 2017, and that’s building on what amounts to deficit spending from 2016,” said Daryl James, executive director of the Montana Infrastructure Coalition. “They’re planning on cutting $50 million in spending in the next cycle. We clearly need additional revenue to get out of this situation. We can’t afford not to do it.”
Shortly after the Legislature failed to pass an infrastructure bill in 2015, the coalition gathered its stakeholders. Together, they decided to pool the coalition’s resources and send a more unified message to state leaders, expressing both urgency and ideas.
To craft that unified message, the coalition’s members, including architects and engineers, city and county governments, organized labor and the Montana Chamber of Commerce, among others, pared down the needs to water, sewer, roads and bridges.
While the needs left off dams, canals and schools, James said, the shortened list was seen as a starting point – areas on which the members could agree.
“We walked through making sure we’ve got consensus in identifying the needs and making sure everyone is singing from the same hymnal in saying, ‘This is what we need to focus on,’” said James. “The list is endless – it’s in the billions of dollars – so you have to start with the basics.”
Even the basics won’t come cheaply, according to a series of reports. A 2011 survey conducted by the Montana Department of Environmental Quality said it would cost $885 million to fix aging and failing municipal water systems, while a 2008 report by the same agency placed the cost of repairing aging and failing wastewater systems at $587 million.
A Transportation Needs Survey conducted by MDOT in 2012 found that $14.8 billion was needed to take care of Montana’s roadway system and bridges. The same survey projected that funding could only meet 25 percent of that need.
With MDT now projecting a $27 million budget deficit, it’s unlikely many of the state’s roadway needs will be met anytime soon. Because of that, James said, state leaders must be open to creative funding solutions.
Those solutions could take a number of forms, including a statewide sales tax, a local-option sales tax, or a boost in fuel taxes. It could also look more closely at tourism.
“How do we tap one of our largest economic engines in tourism?” James said. “We have 11 million tourists each year, and we barely touch them. They have a significant impact on our infrastructure, but they don’t pay for it. So how do you tap that better?”
Over the past year, the Metropolitan Planning Organization in Missoula has worked to write a new Long Range Transportation Plan. Those involved in the effort have also discussed the possibility of implementing a gasoline tax of 2 cents per gallon.
Like other cities, Missoula relies heavily upon the federal Highway Trust Fund. But the fund hasn’t been solvent since 2008, and Congress hasn’t raised the federal fuel tax since 1994, leaving it locked at 18.4 cents per gallon. The state hasn’t raised its fuel tax of 27.75 cents a gallon since 1994.
James said the Montana Infrastructure Coalition could lobby the 2017 Legislature to raise the fuel tax. He said local municipalities may also have to look at exercising their own right to implement the 2 cent per gallon fuel tax.
“I think it’s going to take a little bit of both,” James said. “When you think about local roadway systems and who pays for that and where the money comes from, the fuel tax today really hasn’t changed in decades.”
If the state did raise the fuel tax or allow for a local-option sales tax, James said, it must also consider smaller communities.
“Even if we have an increase in the fuel tax or a local-option sales tax, the folks in Ekalaka or Circle aren’t going to be able to generate much revenue,” said James. “We need to find an effective way to get them some money that brings them up to a basic level of service. We need more money in the pipeline for areas that can’t tap into these other revenue sources.”
James said the Montana Infrastructure Coalition will likely present legislators with a number of scenarios agreed to by its members. He said the state can’t go another two years without adopting some sort of infrastructure bill.
“If we look at revenue generating tools, there’s not an infinite number of tools out there,” said James. “There are 10 or 12 general revenue tools that are applied in every state. We need to look at what’s applicable and politically palatable. We need to look at ways to generate revenue that’s not an increased burden to taxpayers and property owners.”