Bill looks to strip local gas tax from Missoula County, keep others from adopting

Missoula County took the local option gas tax to voters last year, as required by state law, and the voters responded by passing it. The city and county of Missoula agreed to split the estimated $1.1 million in revenue equally to address road needs. (Martin Kidston/Missoula Current file)

With an eye on improving the region’s roads by tapping into tourism, a majority of Missoula County voters adopted a 2-cent gas tax last year, thanks to a tool made available by the Montana Legislature.

But now, a Kalispell Republican looks to repeal the local option gas tax, stripping what Missoula County officials described as one of the best and most equitable tools available to direct local revenue toward local infrastructure.

“This tool actually generates more dollars than the state’s increased gas tax, because that fund is split across the entire state and this directly impacts people who are local using our infrastructure,” said Chris Lounsbury, the county’s CAO. “It’s a direct way to help subsidize reduced property taxes by having everyone contribute to that pot of money.”

The budgets of local governments across the state have grown increasingly tight in recent years as costs rise and the state cuts into funding. But the 2-cent tax passed by Missoula County voters helped transfer some of the area’s infrastructure costs to the 1.5 million tourists who visit each year.

Of the $1.1 million generated by the 2-cent tax, tourists contribute around $450,000. That revenue traveled on down the road until the measure was adopted.

“From a sheer infrastructure standpoint, this is one of the only tools that’s out there,” said Lounsbury. “It impacts not only the everyday user like me who drives the roads of Missoula County, but also those folks who come to Missoula County and benefit from the many recreational opportunities our roads and infrastructure lead to.”

Up until Matt Regier, R-Kalispell, introduced House Bill 464 this week, the Legislature and state leaders had encouraged counties to adopt the local option fuel tax as a means to improve their transportation infrastructure, especially as state funding lagged and the backlog of needs grew.

Missoula County took the measure to voters last year, as required by state law, and the voters responded by passing it. The city and county of Missoula agreed to split the estimated $1.1 million in revenue equally.

“They (the Legislature) asked us to do this,” Commission Josh Slotnick said. “Our ask was approved by our voters, which is something the Legislature wanted by having citizens more attached to tax polity.”

The state’s Bridge and Road Safety and Accountability Account – which also imposes a gas tax – provides just $1 to $2 million locally a year since the state splits the fund equally across all counties.

Before voters passed the local gas tax, Missoula Public Works estimated the city alone had around $7 million in deferred maintenance – a figure that was expected to grow wider without a new funding stream.

“The level of hypocrisy with our state legislature is breathtaking,” said Commissioner Dave Strohmaier. “In one moment, they’re trying to get the federal government off the state’s back and in the next, they’re stripping local government at its most grass-roots level to determine it’s own destiny.”

Members of the Montana Republican Party have long advocated for state’s rights, seeking the room to craft their own rules and regulations free from Washington interference. But they don’t practice what they preach, county officials contend.

This legislative session, Missoula has become the subject of several Republican bills that aim to strip local government of its ability to respond to the demands of local citizens. This session, the city’s ban on selling flavored vaping projects has come under fire, as has the local option gas tax.

Missoula County is the only county in the state that has taken advantage of using the local option gas tax, though Gallatin County is now discussing it, as may others. For that reason, Regier contends that the local gas tax, as a tool, isn’t being used. Therefore, he contends, it should be repealed.

But the county opposes that, saying the revenue serves as a local match for federal funding, which is often required for sizeable grants. That was the case when the county received its $13 million grant for the Mullan area. The Highway 200 corridor project through East Missoula will also depend upon a local match.

“Missoula County will be applying for … grant funding, which requires a local match,” said Strohmaier. “The several hundred-thousand dollars a year we’re brining in via the gas tax was meant to be that local match to allow us to do projects in the hinterlands of Missoula County that wouldn’t get done otherwise.”

Several business organizations helped get the local gas tax passed, including the Missoula Organization of Realtors, engineering firms and others. Missoula County plans to testify against the measure and could be joined by some of those business advocates.

It’s not yet known if the Missoula Chamber of Commerce will play a role.

“This (local gas tax) also has a property tax relieve element to it,” said Slotnick. “We didn’t expand our road budget this year in part because we had access from this new revenue, which comes not just from the folks of Missoula County, but from our 1.5 million guests that previously didn’t contribute.”

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