The Montana legislature has failed once again to pass a bill that would support the increased infrastructure needs caused by oil and gas drilling in eastern Montana. As the semi-annual legislative session closed this week, two bills that would have provided $150 million in infrastructure relief died ignominious deaths.
It was the second consecutive session in which the state failed to provide infrastructure relief to towns like Sidney, Glendive and Culbertson. In 2013, Governor Bullock vetoed a similar bill.
Now there’s no chance of state help until the legislature meets again in 2017.
More drilling means higher infrastructure cost
When oil and gas drilling expands, infrastructure needs increase. More traffic means more road maintenance. More workers means more kids in school. A higher population means a greater need for health care. Man camps full of workers with big paychecks means more crime, and overcrowded jails and court systems.
In a perfect world, more drilling should mean more revenue to the state coffers, which could in turn be shared with local governments to pay for the increased costs. But Montana, as you’ve learned, isn’t perfect. The state has decided to give operators an Oil and Gas Tax holiday to stimulate production, and legislators are determined not to change that. The operators get to keep their profits and local taxpayers pay. And pay. And pay.
This has been going on for years with no state help
This is not a new phenomenon in Montana. In 2012, Bret Smelser, then-mayor of Sidney, said this to the Montana Policy Review:
We are overwhelmed with increases in garbage collections and overwhelmed with police having to respond to more incidents. Our volunteer fire department is stretched: as an example, the other day they responded to three fires before noon. This is a volunteer fire department. Infrastructure, manpower, and the increases we’re seeing in water, sewer, garbage collection–those are the major challenges.
Sidney raised water rates, raised sewer rate, raised sewer hookup fees, and initiated impact fees, but it wasn’t enough.
Then in 2014 the oil price bust provided Sidney with a new infrastructure hit. According to new Mayor Rick Norby, the town will receive $600,000 less in tax revenue from oil production in 2015, plus a hit in hotel and gambling taxes. As a Montana Public Radio report put it, “That’s a big deal when your whole budget is $11 million and your town now has a major highway running through it.”
Crime is up and Norby doesn’t have the police force to deal with it. The town’s population has grown 20% since 2010, and the police force has grown the same amount. But arrests for DUI, assault, narcotics and disorderly conduct have increased as much as 475% in the same period.
The schools need to grow, but a long-term development plan doesn’t have the funding necessary to build new buildings.
And now, once again, the legislature won’t be providing desperately-needed funding. The Senate failed to pass SB374, which would have provided more Oil and Gas Tax revenues.
What it means for the Beartooth Front
This is a cautionary tale for communities along the Beartooth Front. The boom cycle can be ruinous to a town. Sidney is still booming, but the oil price collapse could be a precursor of a complete bust.
The boom was something that happened to Sidney. Growth occurred outside any ability of the town to control it.
Communities concerned about their long-term futures need to plan and take local control of growth. This is why residents of Carbon and Stillwater Counties are fighting to have oil drilling on their own terms.