Now let’s look at the numbers that have resulted from the tax increase. I’m a numbers guy so this is where I live in the legislature.
First, let’s take a look at where the cities and counties were before HB 473. Since 1993 they shared around $16.5 million based on miles of roads and population. The fact that it hadn’t been increased since 1993 put them in a severe crunch since cost continued to rise.
When HB 473 went into effect $12.5 million was allocated to MDT to allow funding for the federal match. Since the funds were collected for less than a full year the money allocated to local governments was smaller that future disbursements.
Currently MDT will get 35% of funds collected capped at $9.8 million. Counties will get 24.7% of collected funds and cities will get 40.3%. These funds will increase with the increase of the tax and fluctuate with dollars collected.
Increases in the gas and diesel taxes are codified in the bill and are as this-4.5cents (2018 & 2019), 5 cents(2020 & 2021), 5.5 cents(2022) and 6 cents (2023 and later). Diesel fuel increase goes from 2 cents to 2.5 cents over the same period. This information and a lot more can be found on the MDT website- MDT.mt.gov.
Since the first collection period wasn’t for a full year I will work with the 2019 figures for three counties and cities in Eastern Montana-Custer, Garfield and Richland counties and Miles City, Jordan and Sidney.
Custer County’s 2019 allocation. $64,273.62
Garfield County 2019 allocation. $70,071.00
Richland County 2019 allocation. $69,313.29
Miles City 2019 allocation. $138,752.00
Jordan 2019 allocation. $11,147.98
Sidney 2019 allocation. $98,155.17
Each local government has to request their funds from MDT. They can request all their allocation or can keep funds in the bank and build on them for up to five years if they have a large project that will require more funds.
What have these governments done so far with their allocated funds? Based on what has been reported to the MDT website:
Custer County $30,564. Sheep Cr. Road culvert replacement
Garfield County $103,070. Road projects
Richland County. $0.00. None used
Miles City. $204,568. Darling addition
Jordan. $5,259. Graveling streets
Sidney $47,006. E. Main repairs
As you can see, each locality can use the funds for roads and bridges exclusively. No money for trails and the like. Information for all local governments in Eastern Montana is also available on the before mentioned MDT website.
This tax is a way to get funds from out of state travelers to help pay for the maintenance of Montanans highways. Tax exempt fuel is not taxed by HB473.
I have spoken with several elected officials and have a few quotes from them:
“The match for BaRSA (HB 473) is set at a reasonable and attainable rate” Jason Strouf
“ The program has been a godsend to the State” Keith Holmlund
“ It’s been great. It even helps bus routes” Jerry Collins(Garfield County)
Of course, as is the case with any program, all the local governments wish there was more money and they had a learning curve to figure out the application process. These were expected but the fact remains that when the tax is fully implemented they are projected to have 160% more than from the previous system and they will still get the funds they currently get from the gas tax before HB 473.
Questions or comments. You can reach me at 951-6764 or via the contact page.