Created on Thursday, 31 January 2013 13:05 Published Date Hits: 1588
HELENA – Renee Rasmussen spread both arms wide in front of her to demonstrate the magnitude of the problems facing her Eastern Montana school district as it endures a steady stream of new students, largely thanks to the oil boom.
“It keeps me up at night,” the Bainville School District superintendent told a committee of lawmakers last week. “I do not have a method to pay for teacher housing or to pay for the school, whether that be $60,000 modular classrooms or whether that be an add-on.”
It’s no secret that towns like Bainville along the oil-rich Bakken formation face a number of logistical challenges as workers and their families flock to the area. People cannot find places to live, towns must build larger sewage and water systems, crime has increased and roads need repair.
One of the big issues lawmakers face during this legislative session is how the state can help communities like Bainville grapple with the boom.
Legislators heard testimony last week on the first of a number of proposals to help the Bakken – most of them bills that would help the region financially.
Rep. Rob Cook, R-Conrad, said people across Montana reap benefits from the government’s take of oil production tax revenue and federal mineral royalties, but it’s the communities along the Bakken that need it most right now.
Cook, along with several other legislators from both parties, has a bill in the works to handle what he deems the most critical of infrastructure needs: water and sewage.
“When you get to capacity, you can’t build any more housing,” he said. “Until you solve the water and sewer infrastructure issues, you can’t even begin to solve the housing issues.”
His proposal would send 25 percent of the state’s share of federal mineral royalties to cities and towns in the region. That money, which amounts to about $8 million a year, would match counties’ current take of the royalties. Currently, the state gets 50 percent of federal mineral royalties. Of that, 75 percent goes to the state’s general fund and 25 percent goes to counties. Under Cook’s proposal, the state would get 50 percent, cities would get 25 percent and counties would get 25 percent.
Additionally, the bill would send a one-time lump sum of $15 million to the region, a figure identical to what Gov. Steve Bullock laid out in his proposed budget. It would also send $10 million over each of the following two years, at which point the royalties kick in.
Another proposal, House Bill 218, would establish a grant program through the Montana Board of Oil and Gas.
The bill’s sponsor, Rep. Duane Ankney, R-Colstrip, told the House Appropriations Committee last week that under his proposal, cities could submit applications to the board for specific infrastructure projects. The board would then disperse up to 25 percent of the state’s share of federal mineral royalties to fund the proposals.
Representatives from the Montana Organizing Project and the Northern Plains Resource Council spoke in opposition of the bill, although both said they agree with its intent.
“We cannot support transferring revenue from the general fund, hurting other community programs across the state,” said Sheena Rice, a community organizer for the Montana Organizing Project.
Rather than take away money from the state treasury to address impacts, she suggested the financial burden fall on companies gaining the most from development.
As some lawmakers advocate for infrastructure needs, others look for ways to ease the burden on schools.
Legislation passed during the previous session restricted the amount of oil tax revenue school districts in oil-producing areas could keep, capping it at 130 percent of districts’ budgets. Any remaining revenue went to the state.
A number of Eastern Montana districts have received an influx of students whose parents moved to the area for work, but not all the schools have gained the additional revenue from the boom. For instance, schools in areas that house workers’ families but have little to no oil production do not generate enough revenue to reach the 130 percent cap, said Sen. Llew Jones, R-Conrad.
His bill, Senate Bill 175, aims to help those districts as part of a comprehensive effort to revise education funding at schools around the state. An initial hearing is scheduled for this week.
Under Jones’ proposal, $8 million in oil tax revenue would funnel through school after school in the Bakken, moving onto the next when one reaches the 130 percent cap. The remaining money would then go to the state treasury.
“Prior to flowing out of the region, this money needs to flow through the circles,” Jones said. “It can fill those schools that have impacts but don’t have funding.”
The House Education Committee held hearings last week on several other proposals to help the region’s schools, including two sponsored by Rep. David Halvorson, R-Sidney. House Bill 176 would raise the 130 percent cap to 150 percent, and House Bill 177 would reduce the percentage of oil tax revenue a district must incorporate in its budget to 25 percent.
Under present law, the amount of revenue districts must include in their budgets would increase to 55 percent by 2015.
House Bill 228, introduced by Rep. Lee Randall, R-Broadus, would allow schools with 5 percent enrollment increases to retain their district’s oil tax revenue above the 130 percent cap for six years.
Legislators worked together during the interim to pinpoint options for the Bakken, said Rep. Austin Knudsen, R-Culbertson. Although a number of those lawmakers have combined ideas and co-sponsored legislation, several different proposals remain on the table.
“I think eventually we’ll either end up with one bill coming through the process or a committee will put together a committee bill that’s a hybrid of the best ideas out there,” Knudsen said.
He and others sound confident when they say this Legislature will address the needs in eastern Montana. Since the previous session ended, dozens of lawmakers from across the state have visited the area and they seem to grasp what’s at stake, Knudsen said.
“I’m excited because there seems to be pretty good bipartisan support for this,” he said. “We really need it.”