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A coal train sits in the rail yard in Missoula.

A coal train sits in the rail yard in Missoula.

Activists have protested coal trains coming through Missoula.

The many projects that coal money support here are another matter.

Coal is the source of the Big Sky Economic Development Trust Fund, which has provided millions of dollars in economic support for some of Missoula’s homegrown businesses since its creation by the Montana Legislature in 2005. Think TerraEchos and Rivertop Renewables.

“I think that the funds Missoula receives are extremely important in terms of economic development,” said City Councilwoman Caitlin Copple, who has sought Big Sky funds to support the council’s economic development efforts. “Does that mean I’m a big fan of fossil fuels? No. But the reality is we live in a state where energy is a really important part of our economy.”

The Treasure State Endowment Fund also comes from coal, and it supports infrastructure such as sewer and water pipes. In this fiscal year, the Montana Legislature approved $480,372 for a bridge project in Missoula County – and $4.5 million for bridge construction across Montana.

In Montana, half of the money that’s taxed on coal goes into a permanent coal tax trust fund, said Andy Poole, a division administrator for the Montana Department of Commerce. Of that amount, 25 percent goes into the Big Sky Development Trust Fund, and its interest backs job creation and planning grants across Montana.

And when it comes to tapping the fund, Missoula is “a very active community,” Poole said.

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The Bitter Root Economic Development District applies for funds on behalf of local businesses, and director Marcy Allen said BREDD is currently administering an estimated $2.4 million in job creation grants representing 225 qualifying jobs – and 274 total jobs. She said growth is often the most hazardous time for a business.

“So helping with financing and allowing a little more money for any other obstacles that might come up with that growth is really helpful,” Allen said.

The strong collaboration among local economic development agencies – BREDD, the Missoula Economic Partnership, the Montana Community Development Corp., and the city and county – has increased the amount of money Missoula receives, Allen said. She said the collaboration leads to strong projects backed with both dollars and technical assistance.

The grants aren’t a guarantee of success, she said, but a business doesn’t actually get the grant until the job is created. A formula based on Montana’s minimum and average wages dictates that the higher the wage, the more the support for the business.

The money can’t go directly toward salaries, but it can go toward, say, flooring and electrical wiring. To qualify, she said a business must be exporting more than 50 percent of its services out of the state.

“The way community wealth is created is by people manufacturing or producing some sort of service and selling it to people outside the region, hence, bringing outside money in,” Allen said.

Big Sky funds also support planning projects, including some $659,397 to Missoula since 2006, according to the Department of Commerce website. Some of that money leverages other dollars as well.

In 2013, BREDD secured a $26,500 grant to help the city of Missoula do a feasibility study on “next generation broadband.” Councilwoman Copple said a report is around the corner, and she said many financial sources are available should the project reach an implementation phase.

“(But) I was not aware of any other planning grants,” Copple said.

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Long ago, the people of Montana made the choice to set up a fund for when coal was gone, said former state Sen. Ron Erickson of Missoula. That way, generations to come could continue to reap the benefits, unlike the way the riches from copper ended up in New York.

“Our decision in this state, and I think a really wise one, was to say the coal is eventually going to be gone,” said Erickson. “We need to set up a trust fund to do lots of good things for the state.”

In the past, he and other legislators have tried to set up similar funds for oil and gas, as other states do, but they haven’t met with success.

In the 1970s, people weren’t thinking about climate change, Erickson said. Now, he said, people know coal is a nonrenewable resource, and many also know it’s a resource that shouldn’t be used. It would take three-quarters of the entire Legislature to “bust the trust,” so even if coal use dries up and taxes dwindle, the trust funds remain.

“We’d be able to use the interest forever,” Erickson said.

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Reach Keila Szpaller at @keilaszpaller, at keila.szpaller@missoulian.com or at (406) 523-5262.

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