Local Leaders Weigh in on Session

By Beacon Staff

Amid the flurry of late-night, last-minute deal-making that precedes the conclusion of every Montana legislative session, it can be difficult to discern what actual laws were passed. In the days following the adjournment of Montana’s 62nd Legislature last week, communities around the state have begun to assess the session to see how they fared – and the Flathead Valley is no different.

From city governments to realtors to educators, virtually every sector of the Flathead economy has a stake in the decisions made in Helena, so last week the Beacon checked in with local leaders for their take on the Legislature. The consensus might best be described as, “tentatively satisfied.”


In the run-up to the Legislature last year, city managers in the Flathead were concerned that bleak revenue forecasts for Montana could result in cuts to “state entitlement” funding for cities – which is basically the portion of tax revenue the state shares with municipalities.

“They froze the entitlement formula, which I guess is good for us because we were concerned they were going to reduce it,” Kalispell City Manager Jane Howington said. “We’re now having to level-fund for the next two years.”

Whitefish City Manager Chuck Stearns was similarly pleased to avoid cuts to entitlement funding.

“I think we survived and, considering the times, probably did pretty well,” Stearns said, adding that funding from a renewable resource grant program would help Whitefish rehabilitate its water system.

Local governments were also concerned that cutting the business equipment tax, which directs a portion of its revenue to municipalities, could result in fewer funds for cities, potentially forcing increases in residential property taxes. But the Legislature managed to backfill funding for cities – though the tax cut bill, carried by Sen. Bruce Tutvedt, R-Kalispell, could be vetoed by the governor.

Howington called the business equipment tax cut a positive move.

“It’s an economic driver,” Howington said. “It will help us to hopefully be more attractive and competitive in bringing economic development in.”

Flathead County Administrator Mike Pence praised the passage of a bill reforming workers’ compensation insurance, carried by Rep. Scott Reichner, R-Bigfork, that should lower rates substantially. According to Pence, the county currently pays approximately $900,000 annually in work comp premiums.

“It’s a huge deal to us,” Pence said, “and of course that positively affects the taxpayers.”

In the realm of land use, Pence was pleased with the passage of a bill, supported by all three commissioners, allowing for the extension of preliminary plats beyond just one year. Another bill, also carried by Tutvedt, allows Rural Special Improvement Districts to more equitably share the costs of road paving, and a third bill confers authority on local governments to reduce speed limits on unpaved roads as low as 25 miles per hour, from 35 miles per hour.


Jim Oliverson, a vice president with Kalispell Regional Medical Center, also had high praise for Reichner’s work comp bill.

“Reichner, I think, did a yeoman’s job taking something as complex and political as this thing and distilling it down,” Oliverson said. “We are self-insured but it affects us in the manner of payment we receive and how long people can be on it.”

Oliverson’s main focus was the passage of a bill allowing patients to buy a “subscription” as part of their health insurance aimed at covering the cost of air ambulance rides – since many insurance policies won’t cover the full cost of such rides.

He added that KRMC looks forward to participating in an interim study over the next two years that examines Montana’s policy exempting nonprofits from property taxes.

“We welcome it and we know what we’re doing, we know what is being given back and we know that there are people out there who are abusing it,” Oliverson said.


Flathead Valley Community College President Jane Karas said she expects to see an $800,000-increase in funding next year due to the 55 percent enrollment increase the college is currently undergoing. In 2013, Karas expects those funds to drop, along with an anticipated decline in enrollment.

Karas was also pleased with a bill by Rep. Randy Brodehl, R-Kalispell, which provides tax credits for donations to tribal and community colleges. That credit previously only applied to donations for larger institutions.

“It’s a win-win for everybody,” Karas said. “That’s one of those little bills that has a huge impact.”


Kalispell Chamber of Commerce President Joe Unterreiner and Kellie Danielson, head of Montana West Economic Development, were also pleased by the passage of a business equipment tax cut and workers’ comp reform.

“It just is another checkmark that business can say, ‘Yeah, this is an environment that is positive to operate in,’” Danielson said.

Unterreiner, however, opposes a last-minute shift of state statutory appropriations into the general fund that will result in fewer bed tax dollars going toward tourism promotion – and cutting funding for local convention and visitors’ bureaus. It’s unclear what the governor will do with the bill.

“We’re disappointed in seeing that; we advocated strongly that that not be included,” Unterreiner said. “We understand that it’s tough times, but we’re believers in tourism promotion as what we need right now for job creation.”


Another note of discord came from John Sinrud, government affairs director for the Northwest Montana Association of Realtors, due mainly to the failure of any legislation to lower property taxes following the most recent state reappraisal.

“We’re disappointed with how the reappraisal process went,” Sinrud, a former Republican legislator from Bozeman, said. “I attribute it directly to the governor’s office and Department of Revenue, because they didn’t want it.”

Sinrud did favor a bill that forces appraisals to take into account whether 15 percent of a given market is composed of bank-owned or short sale properties. He also approves of a bill maintaining the status quo over the next two years, while a study is conducted on the impact of so-called “exempt” residential wells on existing water rights holders, delaying the Department of Natural Resources and Conservation taking authority over such wells.

“It would have had a very negative effect on land prices, as well as current investments in the process,” Sinrud said.

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