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Gianforte signs repeal of local-option gas tax despite plea from Missoula County, contractors

Transportation Traffic
Posted at 5:27 PM, May 11, 2021
and last updated 2021-05-11 19:27:12-04

MISSOULA — Despite the plea of Missoula County government and local businesses, Gov. Greg Gianforte on Monday signed a bill revoking the state’s local-option gas tax, leaving commissioners to consider raising local property taxes to fill the void.

Gianforte’s signature essentially overturns the will of Missoula voters, who adopted the 2¢ per gallon tax last year. It also reverses the desire of the 1979 Legislature, which gave Montana counties the authority to adopt the tax as a tool to raise revenue for transportation maintenance.

“We and other counties across Montana for years had been chastised for not using this ability to put before the voters the question of a local-option fuel tax,” said Commissioner Dave Strohmaier. “The minute the voters in Missoula County actually speak on this issue, it’s immediately repealed or nullified by the state Legislature. It’s deeply offensive to the voters of Missoula County having their voice stripped away.”

The bill was one of many aimed at Missoula this legislative session, as the county was the only one in the state to have adopted the local-option tax. Others were looking to follow suit to help cover the rising cost of road maintenance and transportation infrastructure.

With the tax no longer permitted, the city and county of Missoula must look for ways to cover the $1.1 million in lost revenue. As it stands, county officials said there’s only one option, and that’s an increase in property taxes.

“By having a gas tax, we could have limited the burden on property taxes for repairing our roads, because we can shift some of that financial burden onto the 1.5 million tourists who pay the gas tax,” said Commissioner Josh Slotnick. “The Legislature didn’t want to go that way. They voted for increasing property taxes for the citizens of Missoula County in terms of fixing our roads.”

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¢ tax passed by Missoula County voters helped transfer some of the area’s infrastructure costs to the tourists who visit each year.

In theory, that took the burden off the shoulders of local taxpayers who, before the gas tax, shouldered the entire cost of local roadwork. Of the $1.1 million generated by the 2-cent tax annually, tourists contribute around $450,000.

“There are projects by which these dollars would have played a huge role to get matching federal funds for significant projects,” Strohmaier said. “The reality is, some of those might not get done, and certainly won’t get done on the time frame we’d hoped.”

Many of those projects were in outlying areas such as the Ninemile and Seeley-Swan. County funding doesn’t often stretch that far, though the revenue generated by the gas tax would have extended the county’s reach.

Slotnick said there’s only one way the county can replace the lost revenue.

“We either let the roads go unrepaired or we have to raise property taxes,” he said. “These are all in rural areas. The rural parts of our county would have benefited from the work this tax would have funded. This allowed us money to get that work done.”

The 2021 Legislature took aim at Missoula on a number of fronts this session, though repealing the local option fuel tax strikes directly at local control and the will of local residents.

County leaders called it hypocritical for a Legislature that often resists Washington, D.C., overreach to turn around and dictate local decisions in cities far from Helena.

“This is hypocritical at best and vengeful at worst,” said Slotnick. “Our Legislature proudly waves a banner of being anti-tax and pro-local control. They talk about local control when they face off against D.C., but they didn’t want to abide by the same ethic. They decided to take the power and decision making away from locals.”

The county had written Gianforte asking him to veto the bill last month but to no avail. The local development community, real estate industry and other business leaders also asked Gianforte to veto the measure.

Dave Gault, head of the Montana Contractor’s Association and former director of the Montana Department of Transportation, stood with Missoula County in resisting the bill.

“Regardless of whether you’re a county commissioner, a city councilor or the director of transportation, one thing everyone cares about is how good their roads are,” Gault said in March. “The unmet infrastructure needs we have in this state are well beyond our ability to fund them, to the tune of about 400%.”