Legislative actions may leave Montana taxpayers with additional costs

By Martin Kidston/Missoula Current

While state legislators walked away from the recent session praising themselves for balancing the budget and holding the line on bonding, the consequences of their votes will soon trickle down to local governments, which could face millions of dollars in lost funding.

From the Legislature requiring counties to pay for a full-blown special election when a cheaper mail option was available, to a cap on what the state will pay counties to hold state inmates, the costs to Missoula County alone could exceed $2 million.

And that will require commissioners to make some difficult decisions in the months ahead.

“Balancing the state budget and thumping your chest, saying you're saving the taxpayers money, just meant that all those things dropped down to local property taxes,” said Commissioner Jean Curtiss. “There will be tough decisions to be made.”

Missoula County has already launched a fiscal analysis to determine the impacts resulting from the bills that passed or failed during the 2017 legislative session.

Among them, the Legislature for the third consecutive session failed to pass an infrastructure borrowing bill. While that has consumed much of the headlines, other measures could hurt just as deeply, including a cap on entitlement shares.

“When the counties turned over the revenue for things like motor vehicle registration to the state, we always got a portion of that back,” said Chris Lounsbury, the county's chief operating officer. “The growth rate is supposed to be 3 percent in state law, but it was capped this year at significantly less, so it won't grow.”

In years past, Curtiss said, both the state and counties benefited from good years, and they both shared in the bad. Now, she said, Montana counties won't share in the good, though they'll be required to pick up the slack during lean years.

“This is the second time the Legislature has taken from local government to balance the budget at the state level,” she said.

On the jail front, the Legislature also capped the daily reimbursement rate it will pay a county to hold a state inmate. That will require local taxpayers to cover the difference.

“That rate will continue to be capped at $69 a day, even though it doesn't cover the cost of housing a state inmate,” Lounsbury said. “The actual cost is about $90 a day, so we'll continue to have to absorb that cost through local property taxes.”

Lounsbury said the Legislature also capped the rate it pays counties to hold inmates who are waiting to get into a state treatment program. When added to the cap on jail costs, Missoula County taxpayers will need to make up the estimated $2 million difference.

“That's just in those two programs,” said Andrew Czorny, the county's chief financial officer.

The failure of the infrastructure bill may also have killed several local projects, including at least one water project and another at Frenchtown School. The county already has been forced to cut its dust abatement program due to cuts in federal funding through Secure Rural Schools.

While the Legislature did pass an increase in the gasoline tax for the first time since 1993, the amount settled upon won't be enough to back fill the loss in SRS funding, leaving another $400,000 hole in the county's budget.

That and other failures in the 2017 Legislature have commissioners frustrated.

“The other frustrating thing was the failure, once again, of the infrastructure bill over something of an irrational aversion to bonding at the state,” said Commissioner Dave Strohmaier. “We bond projects in local government pretty frequently, and in our personal lives, we rely upon financing to get things done.”

President Donald Trump is also considering cutting Payments in Lieu of Taxes by 10 percent, a move that would take another $200,000 from Missoula County's budget. The federal government has long paid the taxes to forested counties in the West to compensate for the loss of taxable land.

Curtiss said the cuts could be even greater to smaller surrounding counties.

The full financial ramifications of the 2017 Legislature will be known in a few weeks, Curtiss added.

“NorthWestern Energy's taxes were down $800,000 from our original budget, and the cost of the special election wasn't in the budget,” Curtiss said. “We've had some big hits happen that we'll have to take out of cash. But how do you replace cash? There will be some tough decisions to be made.”

Contact reporter Martin Kidston at info@missoulacurrent.com