From my home in Baker to Sidney to Billings, eastern Montanans are currently living through the latest oil boom. Some of the impacts are from our neighbors to the east, and some are from within our own counties.
With the nation focused on energy independence, Montana needs to realize that oil and gas development is here for the long term, and while it comes with economic benefits, there are also impacts. Now is the time to make the responsible decision to invest in our stressed infrastructure and stretched community services, and to put Montanans’ interests first.
In today’s market, oil companies are making record profits. It is no longer appropriate to give out-of-state oil companies an 18-month holiday from paying their production taxes. But that’s what Montana law does. When it was created, the 18-month holiday was intended to incentivize drilling when the price of oil was at record low levels. We all know that those days are long gone. But yet, the holiday remains.
Some argue that the holiday is needed for development and without it jobs and our economy are at risk. Yet this ignores the fact that incentives are needed to boost a struggling economy. I can assure you that the oil and gas industry is not struggling. There is room for sensible reforms to help eastern Montana. Reforms like placing a trigger on the holiday so that we incentive when the price drops and we don’t when profits deem it unnecessary.
The tax holiday for oil and gas companies means nearly $100 million in lost revenue. The companies that are profiting the most need to pay their fair share. That money should go to repair and upgrade crumbling roads and bridges, to pay for expanded police, fire and ambulance service, to address overcrowding hospitals, and to address the eastern Montana housing crisis.
Oil companies don’t need the financial help, and we can no longer afford to shortchange eastern Montana’s roads, schools, hospitals and emergency first responders – all of which are significantly stressed due to the oil boom. This is why it is so frustrating to see so little movement by the Montana legislature to reform oil and gas tax revenue to get communities like mine the critical help they need.
There have been bills introduced to repeal (Senate Bill 295) and reform (Senate Bill 399) the tax holiday, connecting the lost revenue to the impacts in communities. So far both measures were opposed by the oil industry, which made a lot of noise aiming to convince legislators that touching the holiday would cause the sky to fall. And sadly, it may have worked. At the moment, both efforts have been tabled.
Instead of responsible reform, the Legislature seems intent on simply raiding the general fund. None of these proposals are enough to help communities like mine that truly need it.
However, there is still time to act. Time before the burden of addressing impacts is placed on Montana families. Time before knowing that our needs won’t be met, and communities like Baker throughout eastern Montana will suffer as a result.
Brandon Schmidt is a member of the Baker City Council and a board member of the Montana Organizing Project.