HELENA - It might be easier to crack Fort Knox or hold up a Swiss bank than for Gov. Judy Martz to get the Legislature to pry $93 million from the coal tax trust fund to help balance the state budget for the next two years.
Martz wants to take $93 million from the $600 million coal tax trust fund and pay it back over time, without interest, when the state's budget and revenue picture is rosier. Without the $93 million, Martz's $2.6 billion general fund budget for the next two years doesn't balance, as required. Without the coal tax money, she would have to come up with that amount through further budget cuts, higher taxes or a combination.
Martz has said she won't raise taxes on Montanans, who rank 46th in per capita income. She also signed a campaign pledge in 2000 that she wouldn't raise taxes.
Despite Martz's intentions, when the 2003 Legislature adjourns, the chances are likely Montanans will see either additional budget cuts or higher taxes, particularly "sin taxes" on cigarettes, liquor and gambling, or a tax on rental cars or a higher bed tax or some combination. When the dust settles, Montana's coal tax trust fund likely will be as untouched as the royal family's crown jewels once again.
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Why is that?
Barring some sudden and unlikely changes in philosophy, there is virtually no chance of the 2003 Legislature coming up with the votes to take that money from the coal tax trust fund. The Montana Constitution requires three-fourths majorities in both the state House and the Senate to appropriate money from the principal of the coal tax trust fund. What that effectively means is 13 of the 50 senators - or 26 of the 100 representatives, for that matter - can halt any effort to grab money from the trust fund.
After the coal severance tax was imposed in 1975, Montanans voted the next year by a 63 to 37 percent margin to require super majority votes in both chambers to allow the coal tax trust money to be appropriated. Half of the proceeds from the coal tax goes into the trust fund, while the rest goes for other uses.
Over the years, legislators - mostly Republicans - have made dozens, if not hundreds, of attempts to take some of the coal-tax trust money for various causes, many of them laudable, such as putting more money into schools, buying Virginia City, helping pay for the Lewis and Clark Interpretive Center and other uses. Virtually all attempts have failed, except to create some trust funds within the trust fund.
Republicans ask why the coal tax trust fund should be off-limits, particularly when the state is short of funds. They compare it to a savings account that should be tapped when necessary.
In many cases, Republican governors and GOP legislative leaders have tried to tempt Democrats by proposing spending coal tax trust fund money for causes they know the Democrats support - except for the source of funding. Enough Democrats and sometimes a few Republicans have always stood strong against what they call "raiding" the coal tax trust fund, even if it meant being pilloried by their hometown newspaper editorials.
House opponents of breaking into the coal tax trust fund actually keep a list of names of those who vow never to spend the trust money, come hell or high water. Former Rep. Bob Raney, D-Livingston, said he was "the keeper of the list" in the House from his freshman session in 1985 until he was term-limited in 1999 session. Now Rep. Ron Erickson, D-Missoula, holds the House list.
Raney recalled the legendary and late Rep. Francis Bardanouve, D-Harlem, gave him the assignment in 1985. Bardanouve told him: "You go till you get 26 names (of representatives) that will die before they'd spend the coal trust." Raney did just that. In the back of his black calendar book, Raney always kept the names of at least 26 representatives who promised they would never support any spending of coal tax trust fund money.
Not all Democrats are against spending coal tax trust money.
In the past, most veteran Democratic legislators from Butte, most term-limited now, have been more than willing to spend coal tax money for what they deemed worthy causes. Former Sen. J.D. Lynch, D-Butte, used to say the coal tax fund was intended for a rainy day. Then he'd put a clenched fist beside his head as if he were holding an umbrella and say, "It's raining."
From the start, former Sen. Thomas Towe, D-Billings, one of the primary authors of the coal severance tax, has insisted the trust is not a rainy-day fund to be tapped when times are tough. Rather, Towe wanted to make sure Montanans received forever the benefits from the mining of coal, a nonrenewable resource, with the trust-fund interest going to fund state programs. Towe often talked about how the Copper Kings used the millions of dollars of profits from Butte's copper mine to endow the arts in New York and San Francisco, but left little in Montana.
Other legislators believe it's a trust fund that can be used however the Legislature wishes, regardless of the wishes of the original sponsor.
Few issues separate Montana's two political parties more than use of the coal tax trust fund. As we watch events unfold at the Legislature starting in January, this is one debate to follow. Are Democrats, who are in the minority, and some Republicans, more willing to raise taxes than tap the coal tax trust fund? Are Republicans willing to cut the budget further if the coal-tax attempt fails? What will Martz do if tax increases or more budget cuts reach her desk for her signature or veto?
These will be the debates and votes that we will be hearing much more about in the 2004 political campaigns for governor and Legislature.
Charles S. Johnson is the chief of the Lee Newspapers State Bureau in Helena. He can be reached at 1-800-525-4920 or (406) 443-4920. His e-mail is csjohnson@qwest.net.
