HomeMy WebLinkAboutMT Infrastructure Coalition MT I \ F R A S I R L C T L R F Meeting Minutes
COALITION voting Member Meeting
November 14, 2016
10:00 a.m. —2:00 p.m.
Bozeman Area Chamber(Bozeman)
Voting Members Present:
Webb Brown(Montana Chamber),Tim Burton(MLCT),Jason Rittal (MEDA/Fallon County),Jon
Metropoulos (MAOGCC),Cary Hegreberg (MCA),Jay Skoog(ACEC-MT),Chris Kukulski(City of
Bozeman),Shane Gorder(Richland County),Adam Gartner(Dawson County),Ron Alles (City of Helena),
Tina Volek(City of Billings),Heidi Jensen(City of Laurel),Danette Gleason (Butte-Silver Bow),Shari
Eslinger(AIA/ASCE)
Darryl James (Executive Director-non-voting).
Formal Actions:
Elimination of Tools:
Based on input received at the All Member Meeting held on October 21,2016,the Board recommended
elimination of the following tools from consideration for the 2017 legislative session:
• Vehicle Miles Traveled (VMT)Tax
• Income Tax
• Toll Roads
• Statewide Sales Tax
• Bed Tax
Following brief discussion of each tool,the recommendation to eliminate from consideration was passed
without opposition by the Voting Members on the first four tools in the list above.
The Bed Tax was reserved for future discussion as a viable tool if other,preferred options failed to gain
traction in the Legislature.
Any of these tools may be revived upon a vote of the membership at any time.
Establishment of the Legislative Package:.
Based on input received at the All Member Meeting held on October 21,2016,the Board recommended
detailed consideration of a fuel tax increase,a local option tourism tax,capping the Coal Trust and
establishing new bonding capacity,drafting enabling legislation for public-private partnerships (P3s),
making adjustments to TSEP,and lending support to third-party bonding bills. Following is a brief recap
of those deliberations.
Fuel Tax
The Coalition has repeatedly established that fully leveraging all available federal highway dollars is a
top priority,thus one of the fist goals for a fuel tax increase is to ensure that the Montana Department
of Transportation (MDT) has adequate funding to meet their state match requirement.
Coalition research indicates that MDT currently needs approximately$20 million in additional
funds. With the understanding that$0.01 in fuel tax (both gasoline and diesel) will raise
approximately$8 million,the minimum that would be raised and allocated to MDT would be
$0.04 per gallon to allow for inevitable growth in agency expenditures.
Meeting Minutes—November 14,2016
Voting Member Meeting (Bozeman Area Chamber-Bozeman)
Page 2
Members discussed the fact that the city/county share of fuel tax receipts has been frozen at
just over$16 million. Counties have not seen an increase in allocation of fuel tax revenues from
the state since 1983,and cities have not been adjusted since 1993. Given the current condition
of local roadways, Members discussed allocating the balance of a$0.10 fuel tax increase to
cities and counties through the existing funding formula.
Without opposition,Voting Members passed a motion to pursue a$0.10 per gallon fuel tax
increase,with the following details to be determined:
• Allocation between MDT and City/County governments: Depending upon further
research and internal discussions,the split will be either 50-50,or 40-60 in favor of
city/county allocation. The additional revenue forecast will be added on top of the
existing revenue to establish new percentage allocations of overall fuel tax receipts,
which would then be established in statute.
• At a finer level of detail, Members discussed the distribution formula between cities and
counties. The research team will develop scenarios that would distribute monies based
on an allocation of higher amounts to locations that collect greater tax dollars (i.e.: those
that experience higher levels of traffic on their jurisdictional roadways),and an
allocation of higher amounts to rural areas that experience less traffic,but that do not
have the population/revenue base to support the local/regional infrastructure
necessary to participate in the statewide economy (the formula may mirror the federal
highways approach to providing more funds per capita to rural areas than densely
populated urban areas based on ability to build and maintain essential roadway
networks).
• Of the amount allocated to city/county governments,the contractors have requested that at
least 70 percent of the new total (the majority of the new revenue)be subject to competitive bid.
This request was made to ensure that local governments did not initiate or increase an ability to
compete with private contractors for infrastructure work.
• During numerous discussions within and outside of the Coalition membership,taxpayers have
requested consideration of an adjustment of the vehicle registration fees for electric and hybrid
vehicles that would compensate for their limited contribution to fuel tax revenues. The Coalition
will research other revenue models and develop a methodology for assessing a"user fee"for
electric and hybrid vehicles in Montana.
Local Option Tourism Tax
Without opposition,the Voting Membership approved modifications to the existing Resort Tax
that would allow additional cities,towns and counties to apply the tax with voter approval in
the affected area. The Coalition will develop modifications for further review,but will ensure
that the following conditions are met:
• Local voter approval required
• Mandatory sunset with ability to request voter re-approval
• Limited range of items eligible for taxation (luxury items)
• Mandatory allocation of five (5) percent minimum of revenues allocated to property
tax relief within the affected area
Meeting Minutes—November 14,2016
Voting Member Meeting (Bozeman Area Chamber- Bozeman)
Page 3
• Local government commitment to invest in infrastructure
Enhancing Infrastructure Assistance through the Coal Tax Trust Fund:
This concept was developed organically through the course of several conversations beginning
with the October 21 workshop and extending through subsequent Board discussions. The
notion is that capping the Trust does no harm to any existing programs or the general fund,but
leveraging the Trust to back additional state bonding capacity could provide an immediate
source of funds as opposed to setting up a new trust and waiting several years to accrue enough
of a base and interest earnings to fund even modest core infrastructure projects. With
new/expanded bonding capacity,the state could supply grants directly to critical infrastructure
projects vetted through TSEP or other approved planning processes under which the local
jurisdictions have established need for investment,ability to finance locally,and the need for
assistance.
The research team has been directed to flesh out operational mechanics of this approach.
Based on the concept presented,and the direction to the research team,the concept was
adopted without opposition-pending details to be developed in the next two weeks.
Additional Tools:
The Coalition is developing enabling legislation to provide local governments with the ability to
leverage private investment through Public Private Partnerships(P3s). These arrangements
allow infrastructure owner/operators to contract with private partners for the construction,
operation and/or maintenance of revenue-generating facilities.
The Coalition will also support a reasonable and balanced Bonding Bill. While the Coalition will not
independently develop a project-specific Bonding Bill, Members will engage in the dialogue
regarding the types of projects and the mix of cash and bonds that the Coalition feels is most
appropriate and complementary to overall Coalition goals.
Authorize Community Transformation (ACT):
As a point of information,Coalition Membership discussed a developing local option sales tax option being
promoted by key members of the Billings Chamber of Commerce.
The ACT group is proposing a local option sales tax that would provide the following;
• A max tax rate of 3%
• Maximum duration of 10 years
• Provision for property tax relief
• Requirement for project-specific list of investments
• Voter approval
• Segregation of funds from the General Fund
Meeting Minutes—November 14,2016
Voting Member Meeting (Bozeman Area Chamber-Bozeman)
Page 4
The proposal allows taxable items to include general merchandise,clothing,electrical and appliance,home
furnishings,and miscellaneous retail which may not be included in the Coalition approach to expand the
resort tax.
Voting membership expressed concerns that this approach would not fit within ongoing Coalition dialogue
regarding equity between urban and rural populations,and expressed preference for the Coalition intent to
target tourism dollars as opposed to applying a general local option sales tax.
The Coalition took no formal position on the ACT proposal,but strongly suggested that educational efforts
point out the distinction between the proposed Tourism Tax and the ACT proposal.
Public Information Campaign:
Darryl James pointed out that the Coalition would need to mount a significant public information campaign
to educate elected officials and their constituents about the importance of infrastructure investment in
general,and more specifically about the various elements of our legislative package.
The Contractors have begun to raise funds for the campaign,but the Coalition will need additional monies
from existing and new members to spread our message through social media,paid and earned media,and
other outlets.
Meeting adjourned at approximately 2:00 p.m.
November 15,2016
Contact Executive Director,Darryl James
406.441.9100 I darryl@jamesconsult.conl
FOR 1MMMEDIATE RELEASE: Montana Infrastructure Coalition Adopts Legislative Package
At their recent membership meeting,the Montana Infrastructure Coalition adopted a package of
tools to address the declining condition of our most critical infrastructure, including consistent
funding mechanisms for roads, bridges, water and sewer projects.
Infrastructure Coalition Executive Director, Darryl James,says "Montana hasn't adjusted our
revenue tools and infrastructure funding formulas in decades, and we are unable to keep pace with
growing physical and regulatory demands. Our goal as a Coalition is to identify sustainable funding
for the essential infrastructure required to build and maintain healthy communities and a robust
economy."
The Infrastructure Coalition package includes the following major components:
Fuel Tax Increase:
With a$0.10 per gallon increase in the fuel tax and additional adjustments in the fuel tax revenue
distribution formula, Montana can fully leverage available federal highway funds,and provide a
long-overdue funding increase for City and County roadway and bridge improvements.
Local Option Tourism Taxi
With an emphasis on local control,each community would be empowered to decide whether a local
tourism tax is appropriate in their area. This tool requires local voter approval and re-approval
upon a mandatory sunset, applicability to a limited range of luxury items, at least five percent of the
revenue returned to local residents through property tax relief,and a commitment of revenue to be
invested in infrastructure.
Enhancing Infrastructure Assistance through the Coal Tax Trust Fund:
The Legislature has struggled in recent years with issuing bonds for infrastructure that are backed
by the General Fund. As an alternative,the Coalition proposes that the Coal Trust be capped at$1
billion and new revenues used to back bonds issued specifically for vetted and prioritized
infrastructure projects,such as those that might qualify for the Treasure State Endowment
Program.
Additional Tools:
The Coalition is developing enabling legislation to provide local governments with the ability to
leverage private investment through Public Private Partnerships(P3s),and will also support a
reasonable and balanced Bonding Bill focused on critical infrastructure needs across the state.
"The Infrastructure Coalition looks forward to collaborating with the new legislative leadership and
the Bullock Administration to develop this new approach, but what we know now is that the status
quo isn't working,and we simply must start taking incremental steps towards addressing a
problem that isn't going away and isn't getting any smaller," said Mr. James.
About the Montana infrastructure Coalition
The Montana Infrastructure Coalition is an association of over 70 public and private organizations involved in the design,
construction,finance,operation and maintenance of our most critical infrastructure in Montana. The purpose of this Coalition
is to help change public policy and improve the manner in which State and local governments build and maintain these
essential community assets.
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