When you go looking for money to fill holes in the state budget, $12.2 million just sitting around collecting dust looks pretty good.
The money is in a “stranded fund” and represents part of a $1 surcharge on every Montanans’ cell and landline phone bills. It’s been stuck, mostly untouched, since 2007, which is why this year Gov. Steve Bullock is proposing to sweep the money into the state’s general fund.
The only problem? A big group of stakeholders has been working for nearly a year and a half, carefully navigating differing interests to come up with a well-negotiated compromise on how to spend that money on what it was intended for: enhancing the state’s 9-1-1 system.
“If that money were to be swept, the ability for the state to upgrade its current 9-1-1 network to a next-generation capability would go away,” said Geoff Feiss, general manager of the Montana Telecommunications Association, which represents rural phone providers. He led the group of stakeholders, which included cities, counties, 9-1-1 call centers, law enforcement and landline and cellphone providers.
As a part of his 2019 biennium plan, Bullock is proposing $83 million in one-time fund transfers to bring the state’s $9.7 billion budget into the black. His pitch to take $56 million out of the Treasure State Endowment and Quality Schools grant programs and other state infrastructure funds has been criticized by Republicans who are questioning why the state should replace cash with bonding.
Less discussed is pulling $10 million from the wireless enhanced 9-1-1 account.
Rep. Nancy Ballance, R-Hamilton, is chair of the House Appropriations Committee. She said Friday none of the fund transfers will be included in the final version of the budget.
“We’re not going to leave those. We’re not going to sweep that money.”
She called Bullock's budget an "all-or-nothing plan," saying if the fund transfers don't happen the rest of the budget won't balance.
Republicans plan to make up for the $350 million shortfall through cutting spending.
Rep. Randy Brodehl, R-Kalispell, called the transfer of 9-1-1 money “disingenuous.”
“It would be disingenuous for us to go back to the taxpayers and say ‘You gave us this money because you wanted to be assured when you called 9-1-1 we could know where you are and that call is going to go through,'” said Brodehl, who retired after being the chief of the Kalispell fire department.
So how does Montana end up with $12 million nobody spent?
The money collected from the $1 surcharge on phone bills goes three places – a basic account, an enhanced account and and a wireless account. Money from the accounts is distributed to 9-1-1 call centers, cities, counties and landline and cellphone providers.
Money in the wireless account was available to reimburse cellphone companies that provided enhanced 9-1-1 in parts of Montana. But larger providers weren’t willing to share some of the information necessary for reimbursement, like how many subscribers they had in a region, and so the money went untouched.
In 2013, the fund took in $3.3 million but only gave out $706,788 in grants. Though some years it did disperse more or as much as it collected, over the five fiscal years from 2011-2015 it received $4.2 million more than it paid out. In 2016 the $1 surcharge brought in $13.1 million for all three funds.
“There’s been money for several biennium there, and as we look at the overall needs of our state, here are monies that certainly can help meet our state’s ongoing obligations and continue to be replenished over time as well,” Bullock said of the decision to sweep the fund.
House Bill 61, carried by Rep. Frank Garner, R-Kalispell, is the legislation that would both spend down the trapped money and change how the $1 surcharge is divvied up going forward.
Under the bill, about $5 million of the stranded fund would go to updating the state’s technology to be ready for enhanced 9-1-1. In technical terms it would establish a statewide IP network backbone and upgrade several public safety answering points, or the places where 9-1-1 calls are answered.
The state’s infrastructure is about 80 percent there. There are older answering points in Deer Lodge, Silver Bow, Beaverhead, Powell, Broadwater, Chouteau, Gallatin, Park, Stillwater and Yellowstone counties, as well as West Yellowstone, Great Falls and Malmstrom Air Force Base.
Another $80,000 would go into improving geographic information system mapping done by the state library. This helps 9-1-1 call centers locate those who call in for help. Finally, $350,000 would go into a statewide 9-1-1 planning account.
To keep money from getting stranded going forward, the bill calls for a new method of allocating the $1 surcharge. After July 1, 2018, 75 percent goes to local governments that host 9-1-1 call centers and 25 percent would go to grants for telecommunications providers. Money not given out to companies would be available in the form of grants to counties.
There have been efforts to figure out how to use the stranded funds going back at least two sessions.
Missoula Rep. Tom Steenberg in the 2015 session passed a bill to study next-generation 9-1-1. There’s no established definition of what that means, but it tends to be interpreted as ways of contacting emergency services beyond a phone call, such as texting, sending video of an accident or even through Snapchat.
“It started with a rotary phone on a desk and now with all the technology that’s out there that could potentially communicate with 9-1-1, it’s important to make sure our infrastructure is ready,” Garner said. “It’s not just cellphones, but texting, other things. When it’s you or your family that needs it at 3 a.m., it’s important it works. Whether you’re in Wibaux or Missoula, there’s an expectation that the system will work the same.”
At bill hearings for both House Bill 61 and the now-tabled Senate Bill 95, the companion legislation to the state budget that changes statute to allow for fund sweeping, more than a dozen people testified against using the 9-1-1 funds for something other than what they were collected for.
Sen. Llew Jones, R-Conrad, who is carrying Senate Bill 95, told those testifying at a hearing for his bill it was “somewhat irrelevant” since the bill will be heavily amended.
Still representatives from law enforcement, counties and phone companies spoke out against it.
Feiss said he doesn't think there's a lot of support for sweeping the account, “but everybody needs to find money. So that debate isn't over yet.”
He thinks the discussion will go until the last days of the Legislature in mid-April as Bullock and Republican lawmakers set the final details of the budget. The governor has also proposed several new revenue streams as a part of his budget – steeper taxes on Montana’s highest earners, increased consumption taxes and a new tax on medical marijuana. Republicans have said those are non-starters.
State revenue trends are improving, and Bullock said there’s always a chance the money won’t have to be moved, but added it depends on lawmakers' actions as well.
Though some have said they worry sweeping the funds would make the state ineligible for federal matching grants to help improve 9-1-1 services, Dan Villa, the governor’s budget director, cited a federal rule he said keeps the state able to apply for that money as long as the fund is replenished in a 180-day window.
“These funds have been in the state special revenue account for a number of years with multiple attempts to move them with no success,” Villa said. “Since they have remained unspent for so long, it is reasonable to use them to help minimize reductions in all areas of the budget while still providing an opportunity for the funds to be replenished.”