A handful of local business leaders, including the Missoula Organization of Realtors and several engineering firms, are asking Missoula County commissioners to consider placing a 2-cent per gallon gasoline tax on the primary ballot in June.
Their letter, dated Friday, expressed concern that local government has not been able to keep pace with road maintenance and planning given budgetary constraints. Boosting the gasoline tax could help fill the funding gap without turning to property taxes for road-related needs, advocates contend.
“We know that infrastructure funding is a critical need for our community and supports business growth and quality of life,” the Friday letter reads. “There are limited sources of revenue for roads – almost all road maintenance funding comes from property taxes. The gas tax would be a new source of revenue that brings in money from outside the city and county.”
State law gives counties across Montana the authority to adopt a resolution calling for a bump in fuel taxes, though voters must make the ultimate decision. Missoula County has resisted that call in the past.
But the budgets of local governments across the state have grown increasingly tight in recent years as costs rise and the state cuts back on its distribution of funding. According to Missoula County, boosting the gasoline tax by 2 cents per gallon would generate around $1.1 million annually.
The city and county would split the revenue equally.
“We have the realtors and a leading engineering company asking us to do something about the quality of our roads and we’d like to respond,” Missoula County Commissioner Josh Slotnick said Friday. “We’ll hold a couple weeks of public hearings and thoroughly consider if this is worthy of putting on the ballot. If we put it on the ballot, it’s up to voters to decide.”
Figures provided Friday also suggest that tourists would provide around $400,000 of the anticipated $1.1 million in revenue. Around 1.5 million tourists stop or pass through Missoula County each year, though without a sales tax, local government is largely unable to capture that revenue for public projects, such as roads.
Advocates of a bump in fuel taxes believe capturing some of that revenue could provide relief to property owners, resulting in smaller or less frequent tax increases directed at roads
“Everyone who pays rent or a mortgage or pays taxes on the home they own – every one of us covers the cost of repairing the roads,” Slotnick said. “We have 1.5 million visitors driving on our roads. This is an opportunity to share the burden for taking care of our roads in what I see as a really fair way.”
Missoula City Council member Jordan Hess, who is also a member of the Missoula Metropolitan Planning Organization, said local governments, including the city and county of Missoula, are facing maintenance deficits and a growing backlog of infrastructure projects.
The revenue could help on that front, he said.
“It could mean a pretty significant amount of revenue for both the city and county to deal with our maintenance deficit and infrastructure backlog,” he said. “One of the most important things it can do is match federal money.”
Missoula County, in partnership with the city, recently received a $13 million federal BUILD grant for infrastructure work west of Reserve Street. The grant required a sizable local match, as will future transportation grants that are currently being explored, including Brooks Street and others.
Both the city and county could use their share of the funding to chase those grants for large-scale projects that currently sit out of reach. The funds must be used for road work.
“That $650,000 could be leveraged as 19% of an overall project,” Hess said. “It’s not to say that every dollar of gas tax is going to be a match for federal funds, but it does open the opportunity to diversify our funding sources when we go after these federal grants.”
The Montana Legislature in 2017 enacted a 4.5-cent increase in gasoline taxes – the first increase in decades.
The first public hearing on the issue is slated for 2 p.m. on Thursday, Feb. 27, and the Missoula County Courthouse.