Ten years ago I sponsored Senate Bill 510 in the Montana Senate, a bill which encouraged the vast amount of money from Otter Creek coal development in southeastern Montana to help pay for our K-12 and higher education schools.
Yet not a piece of state-owned Otter Creek coal has been mined, and billions of dollars that will benefit Montana schools sit in the ground. Montana union leaders have supported lawsuits for more education funding and pension bailouts, but they turn silent when environmentalists obstruct school revenue from Montana’s immense natural resources. That gig is up.
It’s time we simplify Montana’s school funding laws. And it’s past time we unify western and eastern Montana, public and private sectors around economic development. As governor, I will bring legislation to eliminate the 95 statewide mills that partially fund education, and in turn, indemnify the schools with the massive energy development revenues. Eliminating the 95 mills will give $209 million worth of permanent property tax relief across Montana. The average homeowner’s property tax will be reduced significantly (20 to 25 percent). Since schools are currently funded primarily by the general fund, they will still receive the money they need. What will change is the funding source. With our current funding formula there has been little incentive for the recipients of government spending to support the creators of government revenue. Our overreliance on funding government operations with property taxes has created an unhealthy disconnect.
My pledge to Montana is if we first focus on developing our vast coal, oil, gas and timber resources then we will firmly fund our schools and address our public retirement funds needs. But we cannot put the cart before the horse. We shall not deal with public pension shortfalls or increased funding requests for government, until first dramatically increasing our natural resource development and promoting a regulatory environment that is regionally equivalent to our bordering states. A total of 38,000 Montanans don’t have a job, and they want one.
The energy boom in Montana can rival the California gold rush of 1849. It’s that big, that valuable. With legislation that encourages responsible development, expedites capital investment, and partners with the private sector Montana can reduce our unemployment from 7.8 percent to 5.5 percent in five years and create 12,000 jobs in the energy sector alone. The additional annual state revenue from natural resource development will eclipse the $209 million of tax relief in less than three years, and sustain over $300 million annual state revenue for decades. The beauty of the economics is this natural resource development revenue over the next generation coincides with the baby boomers retirement years, when additional stress is being put on our tax base.
We will change the way Montana state government interacts with natural resource development. From Libby to Baker, instead of watching from adistance and being indifferent to revenue outcomes, leaders throughout the state should be united in our support of Montana’s competitive advantage of natural resources. In turn, leaders throughout the state should understand that an efficient state government and top-notch educational system are the deserved byproduct of a unified and wealthy state. We became 47th out of 50 because we allowed the spenders of government to disconnect from the wealth creators. If you elect me as our next governor, we’re going to change that.
(Corey Stapleton is a financial adviser and Republican running for Montana governor in 2012.)