Missoula County opposes HB 865: Provide for local government expenditure limitation and penalties, up for second reading on the House floor this afternoon. This bill is detrimental to Missoula and all other Montana counties with populations over 20,000. If this bill had been law over the last three years, Missoula County would have been forced to cut essential governmental services.
This bill has several confusing issues surrounding the election process in advance of a proposed expenditure over the cap, and it limits the County’s ability to construct assets and charge those who use them.
For example, if Missoula County’s Public Works decides to take on a road project that costs $2 million, and the road will last 10 years, in year one we would borrow $2 million for the 10 years, as well as expend the proceeds from the loan on the road improvements. Then depending on the time of year we completed the project, we would have at least one of the semi-annual debt service payments in that year, as well. Now we have a situation where the County will get penalized for the $2 million in road improvements, because they increased expenditures for the current fiscal year. The reality is the $2 million borrowing for the road improvements didn’t affect any taxpayer in the first year, because although all the expenses occurred in the first year, the repayment would take place over the next 20 years. Residents are paying for the road improvements for longer than the road would last. If HB 865 had been in place, we wouldn’t be able to easily take on those types of projects because of the negative effect on the County’s future revenue.
Counties would no longer be able to make prudent business decisions like spreading the cost of County improvements over their useful lives, because in the eyes of HB 865, the $2 million would be spent and accounted for against the cap in one year.
Representatives,
ReplyDeleteMissoula County opposes HB 865: Provide for local government expenditure limitation and penalties, up for second reading on the House floor this afternoon. This bill is detrimental to Missoula and all other Montana counties with populations over 20,000. If this bill had been law over the last three years, Missoula County would have been forced to cut essential governmental services.
This bill has several confusing issues surrounding the election process in advance of a proposed expenditure over the cap, and it limits the County’s ability to construct assets and charge those who use them.
For example, if Missoula County’s Public Works decides to take on a road project that costs $2 million, and the road will last 10 years, in year one we would borrow $2 million for the 10 years, as well as expend the proceeds from the loan on the road improvements. Then depending on the time of year we completed the project, we would have at least one of the semi-annual debt service payments in that year, as well. Now we have a situation where the County will get penalized for the $2 million in road improvements, because they increased expenditures for the current fiscal year. The reality is the $2 million borrowing for the road improvements didn’t affect any taxpayer in the first year, because although all the expenses occurred in the first year, the repayment would take place over the next 20 years. Residents are paying for the road improvements for longer than the road would last. If HB 865 had been in place, we wouldn’t be able to easily take on those types of projects because of the negative effect on the County’s future revenue.
Counties would no longer be able to make prudent business decisions like spreading the cost of County improvements over their useful lives, because in the eyes of HB 865, the $2 million would be spent and accounted for against the cap in one year.
Please oppose HB 865.