Lawmakers Pass Tax Break for Coal Mines

By Beacon Staff

HELENA – A measure that gives an estimated $2.8 million annual tax break to a Roundup-area coal mine passed on the last day of the legislative session, after some heavy lobbying.

Gov. Brian Schweitzer’s amendment to Senate Bill 266 reduces the coal gross proceeds tax rate from 5 percent to 2.5 percent for the first 10 years of a new or expanding underground coal mine.

Sen. Alan Olson, R-Roundup, said he had some reservations about the changes to his original bill, but he said it will help Signal Peak expand the mine, which employs about 280 people.

“It’ll increase their bottom line enough to attract additional investment dollars,” Olson said. “They mean a lot of jobs for Musselshell County.”

Some Democrats criticized the tax cut as a “bailout” for the Signal Peak coal mine at a time when the state struggled to fund education and programs that benefit the poor, children and the elderly.

Olson’s original bill sought to change a law that allows counties to give coal mines a 50 percent tax reduction. His proposal would have let counties consider a reduction of less than 50 percent.

Schweitzer used an amendatory veto to propose cutting the tax rate in half for all underground mines, for 10 years.

The Senate initially approved the change last Wednesday, but lobbying efforts against the measure led to a 25-25 tie vote Thursday morning, temporarily killing the bill.

Olson got the Senate to reconsider the bill and later vote to suspend the rules to allow another final vote Thursday. The Senate agreed to the suspension, after which the measure passed 30-20. Later Thursday, the House approved it 63-32.

Sen. Christine Kauffman, D-Helena, said Schweitzer’s staff put pressure on Democrats to change their votes during a Senate recess. She said the governor sent notes to people in the Democratic caucus and that Dan Villa, Schweitzer’s education adviser, actively campaigned for the bill.

“The blame has to be laid right where it belongs and that’s the governor,” she said. “I think it was underhanded, and I think some Democrats are just kind of puppy dogs for the governor here. They’ll do anything he says and I think it’s shameful.”

Senate minority whip Kim Gillan, D-Billings, denied that the governor’s office had any influence over Senate Democrats. She said she believes Democrats changed their minds in an effort to create jobs.

“We have, from the beginning of the session, been pushing jobs,” Gillan said. “I think Democrats stepped up and voted for this because we wanted to honor our commitment to do something about jobs.”

Schweitzer’s office did not respond to a request for comment from the Great Falls Tribune.

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