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If gas-tax revocation increases property taxes, Missoula County ready to say why: The Legislature

Missoula County is the only county in the state to have adopted the local option gas tax, which was approved by the 1979 Legislature as a means to address the rising cost of road work. It won the support of a majority of voters, but was opposed by the Petroleum Marketers and Retailers Association. (Martin Kidston/Missoula Current file photo)

Signs around Missoula County saying “this poorly maintained road is brought to you” by the state Legislature could be considered if lawmakers pass a bill revoking the 2-cent local option fuel tax approved by voters last year.

And if the county is forced to raise mills to compensate for the roughly $1.2 million in lost revenue, which is earmarked for road projects, tax bills sent to property owners could name the Legislature as the reason for the increase. 

While such thoughts remain tongue-in-cheek, they strike to the heart of the frustration voiced by Missoula officials and the majority of voters who worked to pass the local option fuel tax as a means to generate the revenue needed to keep up with roadwork.

“This was so much effort and coalition building, a year’s worth, and then voters voted for it,” said Commissioner Josh Slotnick. “To then have these guys in Helena take it away because they like petroleum and don’t like Missoula is really hard to stomach.”

The 2021 session has left many believing that the Republican dominated House and Senate in Helena have a vendetta against the more progressive Missoula – the state’s second largest population base. A number of bills will overturn or override local efforts to address local issues, the gas tax premier among them.

Missoula County is the only county in the state to have adopted the local option gas tax, which was approved by the 1979 Legislature as a tool to address the rising cost of roadwork. It won the support of a majority of  Missoula voters, but was opposed by the Petroleum Marketers and Retailers Association. 

House Bill 464, sponsored by Rep. Matt Regier, R-Kalispell, looks to revoke the 1979 measure and prevent other counties from adopting the tax. 

Regier’s bill is widely opposed by the state’s infrastructure lobby, contractors, realtors, residents and individual city and county officials, including those beyond Missoula. Gallatin County and the city of Bozeman have been considering the measure.

The Montana Petroleum Association hasn’t taken a position on the bill.

“There are road projects that have begun and can’t not finish, and we don’t have the money otherwise without this (fuel tax),” Slotnick said. “These are all projects in rural areas, 100% of them. If we do have to raise taxes to add mills, I’d like to call them gas-tax replacement mills.”

While HB 464 hasn’t crossed the finish line, county officials don’t believe they can divert its currently trajectory. Commissioner Dave Strohmaier last week asked Sen. Diane Sands, D-Missoula, to add an amendment to the measure seeking a delay in its implementation if it is adopted.

“We’re going to get screwed at the end of the day,” Strohmaier said. “The best we can hope for is to delay this by a year or two. We’ll see where that goes.”

Strohmaier said the delay would give the county time to find ways to replace the revenue lost by the revocation of the local option fuel tax.

“The final backstop here, if this does go through and is passed by both houses, is the governor,” Strohmaier said. “That’s a card we can still play. I’ll reach out directly to him.”

Gianforte’s campaign for governor was billed as “Montana’s comeback,” and infrastructure played a key piece in it.

Missoula to Legislature: 2-cent local option fuel tax prevented property tax hike