Bullock's Bakken aid proposal needs approval from Legislature

2014-04-17T16:53:00Z 2014-05-30T11:35:14Z Bullock's Bakken aid proposal needs approval from LegislatureBy TOM LUTEY tlutey@billingsgazette.com The Billings Gazette

Montana Gov. Steve Bullock has a $45-million plan to help communities overwhelmed by the oil boom, but it will take significant buy-in from legislators who rejected a similar plan in 2013.

“What we’re putting together is what we’re calling the Eastern Montana Impacting Infrastructure Project,” Bullock told a small gathering in Billings. “It really builds on what’s happened in the past, but also takes some good ideas from folks we’ve heard from on the ground.”

Specifically, the governor is proposing an immediate lowering of interest rates on loans from the State Revolving Fund. The fund is used by local governments to finance water and sewer projects. The money has been crucial to towns like Culbertson, which is in the middle of an $8 million water project for 500 hookups.

Bullock stopped in Culbertson on Thursday, proposing to lower the interest rate on the town’s loan to 1.25 percent, down from 3 percent. Over three or four years, the lowered rate would provide a repayment savings of $15 million dollars to communities in the region. The rate reduction would also be extended to non-Bakken communities with projects already underway. Bullock said the rate reduction would begin later this spring. A state government task force, working from Helena, would also be available to give expert advice on infrastructure projects.

The rest of the of the Bakken aid package — $45 million in infrastructure grants — was less of a sure bet. Bullock said the money would be raised through revenue bonds, which would require two-thirds approval from the 2015 Legislature.

“We run it through a quick-start program that requires legislative approval,” Bullock said. “But, the expectation is the day this bill was signed, the applications would be up and we would have money out by early summer of 2015 after the session.”

Lawmakers panned a similar idea from the governor’s staff in 2013. Republicans argued that borrowing the money through revenue bonds wasn’t necessary when the state was on track for a $300 million surplus.

Lawmakers wanted to pay cash for the Bakken infrastructure needs. Their $35 million plan won near unanimous bipartisan support in the Legislature, but was vetoed by the governor, frustrating lawmakers.

“It frustrated me as well,” Bullock said. “That was one of many bills I was frustrated vetoing. I ended up having to veto $150 million of spending tax cuts after the Legislature left and there were a whole bunch of bills on my desk.”

Vetoing the bills assured the state had a $300 million tax nest egg in case of emergencies, an amount Bullock said was necessary.

“You’re not assured the legislative body will say ‘bond,’ ” said Rep. Douglas Kary, R-Billings. “They may say ‘Let’s pay for it. We have the surplus. You have a huge surplus in your budget.’”

Bakken communities that expected help in 2013, are still waiting, Kary said.

Jeff Essmann, R-Billings and senate president in 2013, said not much has changed since Republicans last rejected the governor’s proposal to borrow money for Bakken infrastructure.

“We need a serious proposal, not posturing,” Essmann said. “Most of the legislators I’m talking to still believe in meeting immediate needs with cash on hand rather than borrowing money so you can cause cash on hand for growing government.”

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