Guest opinion: Bullock's new, old borrowing plan for Eastern Montana

2014-04-22T00:00:00Z 2014-04-22T15:23:10Z Guest opinion: Bullock's new, old borrowing plan for Eastern MontanaBy AUSTIN KNUDSEN The Billings Gazette
April 22, 2014 12:00 am  • 

Eastern Montana is seeing unprecedented growth as a result of the Bakken development. This impact comes not only from drilling and related activities in Montana, but also from “spillover” into Montana from North Dakota. These impacts are real, they are in many cases severe, and they need addressing.

For the last two Montana legislative sessions, I and others have fought for oilfield impact tax dollars to stay where they are needed most: in the areas producing the oil and seeing the most impacts.

On April 17, Gov. Steve Bullock traveled to Eastern Montana to announce his plan for Bakken impact aid. The governor announced plans for the 2015 Montana Legislature to appropriate $45 million for infrastructure in Eastern Montana. As a legislator who has been involved with the issue, I feel obligated to give Montanans some background.

Maxed-out sewer systems

In 2011, we “Bakken” legislators had a difficult time convincing other legislators that Eastern Montana was facing severe impacts from the Bakken boom. We talked about maxed-out city sewer systems that were nearly 100 years old, county roads that were pounded to ruts and full of potholes from heavy truck traffic, and towns that couldn’t afford to expand their municipal water hookups to accommodate the influx of people. Nobody seemed to listen.

However, by the 2013 session, there was hardly a legislator in Helena who didn’t agree that Eastern Montana was seeing severe infrastructure problems. So, several Eastern Montana legislators sponsored House Bill 218 to send direct state aid to Eastern Montana towns and counties to fund desperately needed infrastructure projects. Due to budget concerns, HB 218 was amended down to a price tag of $35 million; not nearly as much as some of us would have liked, but we agreed it was better than nothing. HB 218 ended up passing the Montana House 93-6, and the Montana Senate 47-2.

This was not a Republican bill; there were only 61 Republicans in the House and 28 Republicans in the Senate. The bill had huge bipartisan support, and was easily passed onto the governor for signature into law. We were confident the bill would be signed, as the state was sitting on a more than $400 million surplus at that time.

Bipartisan bill vetoed

Bullock had different ideas. He wanted to issue bonds to pay for the bill. This is a fancy way of saying he wanted to borrow the money to pay for these projects, and that Montana would run a debt and pay interest on this debt.

This made very little sense to me or to most of the Republican-controlled legislature. Why borrow money when the state is sitting on a $400 million surplus and we could simply pay for the projects in cash? That would be like you running up your credit card bill and paying interest on it when you have money saved in the bank; it makes no sense. So, the governor’s bonding/borrowing plan was rejected. In turn, he vetoed HB 218, which left Eastern Montana with absolutely nothing. In the meantime, our state budget surplus has grown to over $500 million in the bank currently.

With that background in mind, we come back to the governor’s new oil field impact proposal to spend $45 million on infrastructure projects in Eastern Montana. Does he propose we pay for it with money we have in the bank, the $500 million surplus? Nope. He wants to bond for it. So we’re right back where we were in 2013. The state is sitting on a huge surplus that could easily be used to pay cash for desperately needed infrastructure projects in the Bakken. But instead, the governor wants to run up the state credit card debt, borrow money and pay interest on that debt over many years.

I do not support such a proposal, and don’t suspect most of my colleagues in the Montana Legislature will in 2015 either.

As Paul Harvey used to say, now you know the rest of the story.

Austin Knudsen, R-Culbertson, is speaker pro tempore for the Montana House.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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