Bullock Proposes $45 Million in Oil Patch Grants

By Beacon Staff

BILLINGS — Gov. Steve Bullock proposed a $45 million grant program Thursday to ease strains on water and sewer systems in eastern Montana towns that have struggled to keep pace with the demands of the fast-growing Bakken oil patch.

The proposal needs approval from the 2015 Legislature. It would be paid for with state bonds — an aspect that’s likely to run into opposition from some lawmakers.

The Democratic governor last year vetoed a broader, Republican-sponsored measure that would have set aside money from mineral revenues to pay for water, sewer and road projects in the Bakken.

Bullock said Thursday the veto was needed to balance the budget. But he agreed action must be taken to respond to the changes underway in the Bakken.

“It frustrated me as well,” Bullock said of the veto. “But I agree that the needs are there. That’s why folks like in Glendive are already working on projects that we can be a part of.”

Cities, towns, tribal governments and local water and sewer districts in 13 eastern Montana counties would be eligible for the grants.

Two additional initiatives will go into effect more quickly: A reduction in the State Revolving Fund interest rate for construction projects, from 3 percent to 1.25 percent, and an offer to deploy state employees to give local governments technical assistance in land-use planning, affordable housing and grant applications.

State Rep. Duane Ankney, the Colstrip Republican who sponsored the vetoed Bakken infrastructure bill, said he supports the idea of more state aid for eastern Montana and said it was overdue.

How to pay for it is a matter that will have to be taken up by lawmakers next year. Using bonds would require approval from two-thirds of lawmakers.

“If he comes at it from the bonding standpoint, there’s going to be considerable resistance,” Ankney said. But he added, “I’m not going to cut off my nose to spite my face. I want to get some help up there.”

Tens of thousands of workers have been drawn to the region in the past several years, increasing demands on school systems, wastewater-treatment plants, law enforcement and other basic services.

Most drilling is occurring in neighboring North Dakota. Yet the pressures from a growing population have spilled across the border.

Bullock made appearances Thursday to promote his proposal during appearances in Culbertson, Sidney, Glendive and Billings.

During the 2013 Legislature, Bullock vetoed Ankney’s bill despite overwhelming bipartisan support in both the House and Senate. Its backers mustered enough votes in the Senate for a veto override but it fell short in the House by six votes.

State Rep. Kelly McCarthy, a Billings Democrat, said Bullock had no choice but to veto the bill. He said fiscal forecasts at the time indicated the state was on track to slide into the red by 2015.

The vetoed measure would have created a fund to pay for improvements with $15 million initially and at least $10 million more added annually until 2020 from U.S. mineral royalty revenue.

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