Martin Kidston

(Missoula Current) The outcome of a bill that would direct a portion of Montana's tax revenue from marijuana sales to roadwork remains in limbo after Gov. Greg Gianforte vetoed the measure. The language used to justify the veto also has left some elected officials scratching their heads.

In its current form, Senate Bill 422 would direct funding toward wildlife habitat and a state account that provides assistance to veterans and their surviving dependents. It also would use 20% of the marijuana revenue to help counties fund the construction and repair of rural roads.

Missoula County said the funding allocated in the bill for roads was based on Montana's existing gas-tax formula, which considers a county's road miles and population when dispersing funds. CAO Chris Lounsbury said the measure would have provided around $100,000 in additional revenue to Missoula County.

“It wasn't a substantial amount of funding,” Lounsbury said. “But every little bit we can use to leverage our application for federal and state grant dollars is very important for the county to be able to maintain those roads.”

In vetoing Senate Bill 442, Gianforte said the measure failed to fund itself and instead, it authorized ongoing funding from the state's general fund to maintain county roads. He said the state has never authorized ongoing resources for local road projects.

The governor also criticized local governments, saying they wouldn't lower taxes on residents even if the state did provide additional revenue for county roads.

“SB 442 creates a slippery slope, an incentive for local jurisdictions to reduce their services while keeping taxes higher on their citizens,” Gianforte wrote. “Instead of cutting citizens' taxes proportionately, they can reallocate those dollars to capricious, unnecessary projects, resulting in a net increase of Montanans' tax burden.”

Lolo forest flooding

The governor went on to say that it's a county's responsibility to maintain its roads. The bill would have created “the illusion that the state will accept increasing responsibility for matters that are strictly under the jurisdiction of local authorities,” he said.

As it stands, Lounsbury said counties have limited means to fund roadwork. Missoula County leverages 1 mill that only applies outside city limits. It raises a “very small amount of money” to help leverage larger grants from state or federal sources for road work.

Lounsbury said the state has a role to play in county road maintenance and SB 422 would have provided additional resources.

“I think it used the right formula, which is based on county road mileage and population, to create a pretty equitable split among counties,” Lounsbury said. “It's a missed opportunity. Maintaining county roads has always been a partnership between the counties and the state and federal government to maintain road miles.”

Missoula County voters two years ago approved the state's first local option gas tax – a decision that was authorized by the Legislature in the 1970s. But as soon as voters adopted the measure to add resources to local road projects, the 2021 Legislature revoked the option.

Without the gas tax option or the funding provided in SB 422, county officials say they have few means to cover the many miles of roads under their jurisdiction. The loss of options also strips the county of its ability to collect taxes from tourists and direct the revenue toward roadwork.

“It would be one thing if the only folks who drove on our county roads was our county residents who are paying property taxes for the upkeep of those roads,” said Commissioner Josh Slotnick. “But that's not at all the situation.”

Slotnick, who advocated for the local option gas tax, said Missoula County welcomed 3.5 million tourists in 2022. They stayed an average of 6.5 days and, as Slotnick notes, they likely traveled the county's roads but didn't pay their share for the upkeep of those roads.

“We who pay property taxes here covered almost all those costs,” Slotnick said. “This is another missed opportunity to share a burden that otherwise lands squarely on the shoulders of our homeowners and renters.”

Commissioners also took issue with the governor's suggestion that elected officials at the local level spend funding “on capricious, unnecessary projects.”

They suggested such language was a “prerogative soundbite.”

“There's some hypocrisy and irony in that our state Legislature likes to turn and shake its fists to Washington, saying it should have local control,” Slotnick said. “But they think that sentiment stops in Helena when in actually it goes out to all our counties and municipalities. We who are closest to the situation on the ground understand things best and should have the authority to make decisions for the folks we serve.”

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