Less than three weeks after President Joe Biden signed the mammoth American Rescue Plan Act, a $1.9 trillion federal COVID-19 recovery package, Montana lawmakers have shepherded a bill to spend most of Montana’s share of that sum across its first major hurdle.
House Bill 632, which passed a House vote on a wide bipartisan margin Tuesday, authorizes around $2 billion in federal money and creates a process for making significant investments in infrastructure, broadband connectivity, social welfare and healthcare programs — not to mention direct allocations to cities, counties and tribes and numerous, smaller one-time spends in state agencies — during the next four years.
Lawmakers on Tuesday added a series of amendments to provide sideboards on programs administered under ARPA, but ultimately voted down attempts by Democrats to broaden mortgage and rental assistance and offer direct payments to essential workers.
The bill, a result of weeks of late nights and weekends for the group of lawmakers tasked with implementing the federal package, is not yet a finished product. It awaits one more vote in the House, and will then go to the Senate for further tweaking.
It will, in the words of sponsoring Rep. Frank Garner, R-Kalispell, put broadband in Sun Prairie, waterlines in Circle and “build a bridge to the future” for Montana, not to mention possibly financing the construction of actual bridges.
“It actually gives me chills when I think about the impact that’s going to have on our state and communities,” said Rep. Connie Keogh, D-Missoula. “It’s going to be transformative.”
What’s in the bill
Montana received around $2.7 billion from ARPA, the third major federal spending package targeted for COVID relief and the first of the Biden Administration. That sum can grow as project details become final and the feds issue further guidance. The key principle of the package is to support programs that can help people and their governments recover from the virus, funding mortgage and rent assistance, job development, testing and vaccine rollout and more.
Some $2 billion of Montana’s allotment is in HB632, as some of the federal money can be banked and spent across multiple legislative sessions. Hundreds of millions are locked in strictly regulated government programs like food stamps; the Legislature has some direct authority over around $900 million and still must closely follow forthcoming federal rules.
Vast swaths of that $2 billion are at this point only set aside for general purposes. Part of the legislative proposal is to create a series of committees that will meet after the session ends to act as a clearinghouse for spending requests and to ensure that lawmakers are still keeping tabs even after most leave Helena. The bill leaves the governor the authority to redirect individual line-items up to $100,000; beyond that amount, his office has to justify the change to the Legislature.
“Flexibility is granted with an expectation of transparency,” said House Appropriations Chair Llew Jones, R-Conrad, the ARPA bill’s principle architect.
Local governments will receive $339 million in direct ARPA payments following a formula derived from their population, according to Jones. Lawmakers approved an amendment Tuesday allocating an additional $150 million in infrastructure funds for local governments based based on rural road mileage, which Jones said is necessary to ensure that funds get to sparsely populated communities.
Exactly how much some cities will get is a point of contention, especially for Democrats. Earlier in the process, Rep. Matt Regier, R-Kalispell, attempted to introduce language that would bar a local government from receiving aid money through the Legislature if it has COVID-19 regulations stricter than the state’s on the books.
That provision was significantly watered down, but remains ultimately intact in the bill: those cities that keep mask mandates and other restrictions in law will see their allotment cut by 20%. Republicans rebuffed an amendment by Democrats to remove that language Tuesday.
“We have not gone through this yet, and yet we are going to penalize those local governments that wish to protect their people and continue to have mask mandate, social distancing and continuing to have those regulations to protect the people in that town or city,” said Rep. Sharon Stewart-Peregoy, D-Crow Agency, who carried the amendment. “I believe it’s counter to the intent of Congress.”
Jones said the restriction ultimately only affects state matching funds for infrastructure and economic development projects, not the whole pot of money that a local entity could receive. He defended the language as comparable to other requirements the state places on cities that want state grant money.
Regier, on the floor Tuesday, argued that government is the reason for economic hardship post-COVID-19.
“You look at all these allocations of dollars, it’s a clear admission by government of the aspects of society that were hurt,” he said. “If there are local Montana governments that want to continue to hurt their economies, hurt their people, those decisions, mathematically, have a cost.”
Bridges and Broadband
One of the most significant investments in the version of the bill lawmakers approved Tuesday is $250 million for an ambitious proposal to expand broadband in the country’s least connected state, where in a dozen counties less than half of the population has high-speed internet. While $100 million is more modest than a plan that the Department of Commerce brought to legislative appropriators as they were drafting the bill in subcommittees, it’s still a potentially transformative project.
“This money, if done the right way, is going to change the face of connectivity in Montana,” said Rep. Mike Hopkins, R-Missoula, who oversaw the subcommittee tasked with infrastructure and communications. “This will give rural communities in the state the ability to control their economic future.”
The Commerce Department said in presenting its initial plan that the goal is to achieve symmetric 100 mbps speeds across the state. Director Scott Osterman, perhaps optimistically, told lawmakers at the time that he wanted to begin laying fiber in 60 days.
What these broadband projects will look like is unknown. Expanding connectivity was a stated priority of both parties long before the ARPA funding was available, and lawmakers will be jostling to see existing proposals met — Democrats have plans for a $200 million revolving loan program, while Sen. Jason Ellsworth, R-Hamilton, is carrying a bill for a broadband grant program that may be amended to become a vehicle for an array of broadband projects under ARPA.
The bill also sets aside $500 million for infrastructure projects, mostly for water and sewer, and an additional $119 million for capital investments. Much of the money will fund projects already laid out in existing infrastructure bills like House Bill 6, which contains dozen of water projects like the St. Mary’s Diversion Dam that will receive up to $125,000 apiece.
No direct payments
One of the amendments the House debated Monday would have spent $200 million to send out $1,000 direct payments for essential workers who earn under $30,000 a year.
Rep. Mary Caferro, D-Helena, who brought the amendment, described the payments as a bonus to reward Montanans who never had the opportunity to work from home.
“Just a short time ago, we passed a resolution thanking our essential workers,” said Rep. Derek Harvey, D-Butte. “But to put it frankly, those were just words on a piece of paper. Today, this amendment gives us all the opportunity to take action on these words.”
But Republicans argued against the idea and killed the amendment, in some cases because they felt the money would be better invested in career development, or because, in the words of Rep. Braxton Mitchell, R-Columbia Falls, direct payments are “a clear socialist policy.”
Despite disagreement on those points, the process has been smooth and civil relative to recent debates in the Montana Legislature. In three weeks, lawmakers produced a workable plan for spending about as much money as is in the state general fund.
The speed of that process has given some heartburn to Democrats who also warned the bill was being drafted too quickly and without adequate public feedback.
“There are deadlines littered all over the bill,” said Rep. Jim Hamilton, D-Bozeman. “We don’t even have all the money yet.”
And some Republicans, including Gov. Greg Gianforte, who decried ARPA as a “fiscally irresponsible progressive wishlist,” have bristled at the prospect of growing government and taking billions in federal funds — at least from a Democratic president.
Garner pointed out to skeptics that if the state doesn’t allocate this money, another one will. He posited: Why should Montana finance developments in Portland or Seattle?
“Today, I’m here to vote green to prove the people wrong who said that this would cause the folks in our state to become more dependent on government,” Garner said, calling the bill a winning bet on Montana citizens. “This is about transforming our state, about anticipating what is yet to come.”