By Tim Leeds
Payment of first quarter oil and gas production tax revenues to oil and gas producing counties has been delayed to Aug. 31, the Montana Department of Revenue wrote in a letter to the counties on Aug. 1.
The deadline for payment of the first quarter revenues was July 31.
Hill County Commissioner Pat Conway said the distribution for Hill County should be several hundred thousand dollars. He said the late distribution is causing budgeting problems for the oil and gas producing counties, not just Hill County.
Conway said if the money had been distributed on time, it would now be in Hill County's accounts, earning interest. He said they are concerned about receiving the interest the money should be earning for the county right now.
Blaine County Commissioner Art Kleinjan, the chair of the Montana Oil, Gas and Coal Producing Counties, said the interest they should have received amounts to several thousand dollars for Blaine County. He said this is a pretty significant amount, and they want know who's going to get it.
Don Hoffman of the Department of Revenue said they will make the payments, with interest, by Aug. 31.
Hoffman said the problem was that the old Combined Oil and Gas System (COGS), the computerized distribution system for the revenues, could not handle changes in the computation and distribution of the taxes made by the 1999 legislature.
Hoffman said a team tried to have a new COGS in effect in time for the July 31 distribution, but the system was not working in time for the deadline.
He said they were unable to enter the revenue returns into the new system, but those figures are currently being entered.
Hoffman said the system is still unable to compute the distribution, but they have contingencies in place to guarantee payment by Aug. 31 even if the new COGS is not completed then.
State law guarantees payment of interest earned on the funds to the counties at the time of distribution, Hoffman said. He said the interest paid will be at the rate the state has earned on their short term investments with the money. He said this money has already been earmarked for those payments.
Kleinjan said the payments usually came a few weeks ahead of the deadline in the past. He said they received the payment on July 17 in 1998.
Kleinjan said the late payment is causing problems in setting the county budget. He said the preliminary budget was due the second week of July, and the final budget is due the second week of August. He said they have a rough idea where they are financially, but the state is so late with the oil and gas payments and the assessment of property values that they can't give a final budget.
Kleinjan said they might be able to finalize the county's budget with a provision to revise it as it needed with different figures as the final values come in. He said it is difficult right now without the funds as the county is low on cash and reserves.
Conway said one of the problems is that the schools will be open and running before the Aug. 31 deadline. He said 75 to 80 percent of county money is distributed to the schools. He said they can use reserves as needed, which is what the reserves are for, but if the distribution had been on time this wouldn't be needed.