Significant sections of Livingston’s downtown streets are cordoned off as excavators dig up roads, replacing and upgrading water and sewer pipes.

The $2 million project is one of four phases of improvements to Livingston’s downtown. It is among a long list of projects the city needs to complete over the next several years as its infrastructure ages, its population grows and its tourist traffic increases, said public works director Shannon Holmes.

“Our community is maxed out on what our tax base and ratepayers can afford,” he said. “It’s not clear where we can get the funding for these projects.”

To address the needs of places like Livingston, some local lawmakers spent the legislative session working on developing new funding sources for infrastructure projects. Their efforts had mixed success, and they’re now exploring ideas they might bring forward during the next session.

Among the successes was a new law — the Infrastructure Development and Economic Accountability Act — which creates guidelines for how the state takes on debt and sets aside funding for infrastructure, said Darryl James, executive director of the Montana Infrastructure Coalition. The act helped lawmakers rally behind a bonding bill — the first in several legislative sessions — that allows the state to borrow money for several projects including renovations to Montana State University’s Romney Hall.

“The infrastructure funding measures coming out of this legislative session are important, but we shouldn’t lose sight of the fact that they’re predominantly focused on state-owned, vertical infrastructure,” James said.

To target other infrastructure projects, local lawmakers proposed several local option sales taxes during the session. Almost all died quickly.

One sales tax proposal came from Rep. Laurie Bishop, D-Livingston, who introduced a bill for a 4% tax on luxury goods in counties that are next to national parks or have at least one of the state’s 10 resort areas. The bill would have allowed several counties, including Park and Gallatin, to enact sales taxes.

“I want to protect our local taxpayers and am mindful of how we do that in an equitable, smart and fair way,” she said. “While it is not the sexiest thing for a Democrat to stick her name on an increasing sales tax bill … there was just no way to ignore that this was a way to do the work of our community.”

The bill was tabled in the House Taxation Committee, which Rep. Alan Redfield, R-Livingston, chairs and where several local option tax bills died during the legislative session.

“I’m sure everyone thought all I was trying to do was kill bills,” he said. “We had 350 tax bills that were brought up (and) 111 were actually heard,” he said. “I didn’t get to see all of them, but my committee killed 40, which was $1 billion worth of taxes. We had all these people trying to take a bite out of this tax issue.”

Instead of a piecemeal approach, Redfield said the state needs to look at its entire tax structure. He proposed a bill, which passed the Legislature and counts Bishop among its supporters, to study how best to modify and update the state’s tax structure. He plans to work with lawmakers and local officials to look at topics like how to tax e-commerce.

“I’ve been an anti-tax guy my whole life, but you also have to have basic services,” he said.

Before the next legislative session, Sen. John Esp, R-Big Timber, plans to look at infrastructure needs from a slightly different perspective — finding ways to minimize the growing regulatory costs local governments face from state and federal agencies and to attract business to Montana, which would increase the state’s tax base.

“What came out of the session was that we need to stop taking little incremental steps at this,” James said. “We recognize that this is a serious problem, but this is not the way to do it, so we are now thinking seriously about comprehensive tax reform and how it can address infrastructure.”

Perrin Stein can be reached at 406-582-2648 or at Follow her on Twitter @PerrinStein.

Perrin Stein is the county, state and federal government reporter for the Chronicle.

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