By Martin J. Kidston
The State Supreme Court will soon decide if a newly passed bill is as unconstitutional as its opponents say it is.
According to those against HB 260, the results of the high court's ruling could allow legislators to raid the state's Coal Tax Trust Fund.
Sen. Jon Tester, D-Big Sandy, said HB 260 is an attempt by state republicans to replace the state's Coal Severance Tax with the new Coal Producer's Tax.
Tester said the attempt is significant because with the Coal Severance Tax in place, the legislature would need 3/4 majority vote to tap the principal in the Coal Tax Trust Fund, and that's never been accomplished. However, if HB 260 is permitted to stand, and thus allows the Coal Producer's Tax into law, then the legislature would only need a simple majority vote of 51 percent to raid the principal in the Coal Tax Trust Fund.
That's a dangerous concept, Tester said, not only because the Montana Constitution dictates how the Coal Tax Trust Fund shall be operated, but also, because Tester, like other legislators who oppose HB 260, sees the Coal Tax Trust Fund as the state's savings account that should be saved, not spent.
"Before the 1999 legislative session, we had the Coal Severance Tax, and the constitution states that half that tax shall go into the Coal Tax Trust Fund, and the other half can be spent in a variety of ways, such as state infrastructure," Tester said. "Since the constitution protects the trust fund, there was a move to implement the new tax, and many people said it was baloney -- that the legislature did this to get around the constitution."
The State Supreme Court will rule on the constitutionality of the new bill, but in the meantime, Tester said that with the system set up the way it was before the bill was introduced, the Coal Tax Trust Fund had always "continued to grow."
"The interest off the trust fund alone contributes $63 million to the state's general fund," Tester said. "That's paying for a significant amount of our state's infrastructure projects."
It also pays for other projects, such as the inspiring Montana Cooperative Development Center based at MSU-Northern, which has funding locked up in the legislative quagmire.
The MCDC has $65,000 allocated to fund its programs to help rural agricultural producers build cooperative "teams" in order to compete in the changing market. However, the funds are inaccessible, and won't be made available until the ruling is handed down.
A new pipeline for water on Rocky Boy's Indian Reservation is also waiting for the ruling before the project can proceed.
"If we're going to fund these projects, whether it be the Montana Cooperative Development Center or the water pipeline on the Rocky Boy Indian Reservation, we should do so in a manner consistent with our constitution," Tester said. "It's not proper to subvert the constitution."
"The projects in HB 260 are good projects," Tester added. "But the funding sources are flawed. If the funding followed the guidelines of the state's constitution, I wouldn't be opposed to it."
