Senators Start to Unravel Stimulus Money

By Beacon Staff

HELENA – There was no shortage of ideas pitched Tuesday for spending stimulus money, as state senators began looking at the federal package aimed at spurring the economy.

A hearing by the Legislature’s Senate Finance Committee covered different pieces of the $800 million in federal money that will be funneled through Montana. Legislators were told that much of the money would be allocated through existing programs and formulas.

The lawmakers can influence how highway construction money is spent, as long as federal guidelines are met, a legislative staffer said. But lawmakers learned they will have much more discretion with as much as $200 million. The money may be appropriated either directly with few strings attached, or in the form of state revenue freed up as federal dollars cover standing appropriations.

The governor’s office said it will release its proposed spending plan for the stimulus later this week.

Evan Barrett, the governor’s economic development adviser, said that some sort of stimulus for the forest products industry will be part of the recommendation for the discretionary money. Places reliant on the industry are hurting, he said.

“They can ill afford to have a basic industry like wood products go down,” Barrett said. “Survival of this industry is critical.”

Jim Lynch, director of the state Department of Transportation, said about $200 million will be available for highways. He said the money has tight requirements, such as a demand that money go to projects that can start quickly, and comes with the promise of oversight.

“We are totally expecting inspector-general reviews,” Lynch said. “They are going to want full transparency in the way the money is spent.”

He said a list of proposed projects is on the agency’s Web site.

The Montana Department of Revenue said that proposed tax relief in the federal package will result in about $525 million in tax reductions for Montana residents and businesses.

“These middle-class tax cuts will have a significant impact on stimulating our economy,” said Revenue Director Dan Bucks. “Middle-class families will spend this money.”

Advocates from a variety of areas gave the lawmakers ideas for the money. Advocates pitched such ideas as programs to improve community care for the needy, and schools touted the benefits of investing in education-related initiatives. Local governments said they have long lists of construction projects that could start quickly. Others touted investment in libraries and historic buildings.

The building industry said it is ready to help put the stimulus money to use, and warned the state needs to speed environmental permitting to ensure projects go quickly.

Mike Newton, who runs sand and gravel operations, said the building trades have equipment and people ready to work.

“This is a big deal,” he told the Senate Finance Committee. “We need to get this done. We need to get this money to the right place.”

The informational hearing jump-starts a process that will actually begin in the House Appropriations Committee before moving to the Senate.

Lawmakers have said they will work on their usual, main spending bill — House Bill 2 — then on a separate companion bill to spend the stimulus money.

Legislative leaders said they want to make sure the stimulus money is allocated for one-time initiatives that won’t burden future legislators with unfunded obligations.

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