US coal tax cap under fire

WOLF Creek Republican Rick Ripley’s attempt to change the constitution to cap Montana’s coal severance tax at $1 billion ($A1.28 billion) and funnel cash into an infrastructure fund has met opposition Democrats who would rather keep the money rolling in at the expense of coal.

Anthony Barich

Ripley’s proposed bill to establish the Build Montana Infrastructure funding scheme will be heard by the Senate Natural Resources Committee today.

While Legislative Fiscal Division records show the coal tax trust fund had $953 million in it as of mid-last year, Ripley said it was projected to reach $1 billion by July.

Ripley said he was willing to work with Democrats to “massage” the bill to gain cross-party support, including Governor Steve Bullock, who can’t see the bill happening and may have the power to veto it anyway.

If 100 of the 150 legislators vote for Ripley’s bill, called SB353, it would go directly onto the November 2016 ballot and not to Bullock for his signature or veto.

Bullock’s spokesman David Parker said that while the governor was “pleased to see broad legislative support for addressing infrastructure needs across Montana”, he reiterated that the coal trust fund had served the state well since its inception and “the governor does not believe altering the trust at this time is the best way to address those needs”

Another Democrat, Senator Thomas Towe, who authored the constitutional that was overwhelmingly adopted by Montana voters in 1976 to establish the coal tax trust fund in the first place, immediately dismissed Ripley’s attempt to cap the tax as an attempt to “bust the trust”

“We told people it would benefit Montanans forever,” Towe said.

“When the coal is gone and we no longer have any coal tax revenues, the revenues from the trust fund would continue and will benefit future generations. I want to be able to look our grandchildren in the eye and say we allowed this treasure to be removed from the ground, but we did not squander your inheritance.

“We have some things left over.”

This prompted Ripley to defend his proposal, saying: “It’s not busting the trust. It’s putting this money to use for Montanans.”

Half of the $57.6 million generated by the severance tax on coal in fiscal year 2014, went into the permanent trust and can’t be spent without approval from at least 75% of both the House and Senate, which has proven just about impossible.

The other half is allocated to the state general fund, long-range building program, coal natural resource account, a combination of the Montana growth through agriculture, conservation districts and state Library Commission, the state parks trust, renewable resources debt service, cultural trust and coal and uranium permitting and reclamation program.

Ripley’s change would see money spent on drinking water systems, wastewater treatment, sanitary sewer or storm sewer treatments, solid waste disposal, city and county roads and streets, bridges and schools “in limited exigent circumstances”