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This story is excerpted from Capitolized, a twice-weekly newsletter that keeps an eye on the representatives you voted for (or against) with expert reporting, analysis and insight from the editors and reporters of Montana Free Press. Want to see Capitolized in your inbox every Tuesday and Friday? Sign up here.
The idea of investing $2 billion from the state’s General Fund into the coal severance tax trust fund is gaining momentum. It has garnered support from Democratic legislative leaders and has attracted a diverse group of lawmakers from both parties, including members from different factions within the GOP, who have signed on as co-sponsors. A hearing is scheduled for next week.
“The coal trust fund is in the Constitution. It’s been a good idea for 50 years. And so why aren’t we looking back to a program and a resource and an asset that we know is a good idea to pay it forward for the next 50 years,” said the sponsor of Senate Bill 346, Sen. Ryan Lynch, D-Butte, who’s been telling people to “trust the trust.”
Money in the coal trust is invested, generating interest that flows to uses including water and sewer projects, job creation grants and public school facilities. More than $1 billion sits in the trust currently.
Lynch declared that the coal trust fund is a beneficial concept as it covers a wide range of areas in Montana including infrastructure grants, planning grants, water, and wastewater. He emphasized that the fund has a positive impact on every aspect and corner of the state, inviting anyone to present arguments against it.
The bill’s more than 40 cosponsors include House Minority Leader Kim Abbott, D-Helena, and numerous other Democrats in both chambers along with more than a dozen Republicans, from comparative moderates like Sen. Jeff Welborn, R-Dillon, to relative hardliners like Rep. Braxton Mitchell, R-Columbia Falls. Rep. Amy Regier, R-Kalispell, the sister of House Speaker Matt Regier, is also signed on.
As budget talks heat up, the proposal has caught the attention of Republican legislative leadership and officials in the governor’s office, but not necessarily because they’re on board. As the state is preparing its two-year operating budget, it’s sitting on an estimated $2.5 billion budget surplus in the bank. The dozens of spending, tax rebate and tax cut bills advancing at the Legislature total roughly $2 billion over the biennium. Lynch’s $2 billion bill, should it pass, would conflict with the ambitions expressed in those bills.
“I can speak for leadership. We don’t support the bill,” said Senate Majority Leader Steve Fitzpatrick, R-Great Falls. “It’s $2 billion, which means we won’t be able to do things like fund the tax rebates. It would prevent us from doing things that are good policy, like front-loading the gas tax accounts. My view is there’s nothing wrong with saving money … but when you have pressing immediate needs, you know, those need to be taken care of. And we do have pressing immediate needs.”
Matt Regier, the House Speaker, exercised caution when discussing the bill, acknowledging it as a potential choice for utilizing the state’s surplus, but expressing skepticism about its chances of passing with a complete allocation of $2 billion.
Several lawmakers sponsoring the bill have already voted for priorities that would likely conflict with the coal trust allocation, like what’s come to be known as the six- (or sometimes eight-) pack: a series of GOP-backed tax rebates, tax cuts and other spending measures. And Democrats have their own $1 billion plan to tap the surplus for investments in affordable housing, childcare, health care reimbursement rates, progressive tax relief, rebates for renters and more.
The bill could also eat up funds that the governor has set aside in his recommended budget, like a $190 million income tax cut. Gianforte avoided saying anything definitive on the bill when asked in a press conference last week.
There are skeptics of the coal trust bill who speculate that its primary purpose is to provide lawmakers with negotiation tools to address their budget priorities, rather than actually investing money in the trust.
“It’s being used more for leverage than reality. It’s offering an option,” said Rep. Llew Jones, R-Conrad, the House Appropriations Committee Chair. “This would be saying, look, we don’t have to spend money, we can just put it in the trust.”
The GOP’s right-wing members would aim to utilize the bill as a bargaining tool to secure increased direct tax rebates while reducing ongoing spending.
According to Fitzpatrick, the reason behind their actions is their desire for increased funds allocated to rebates.
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“Basically we put that bill up because we feel that there is revenue surplus money that is being directed in ways that maybe are not conducive to a conservative thought process,” said Sen. Dan Bartel, R-Lewistown, a cosponsor. “So we just put the bill up and we put a $2 billion price tag on it and allow the legislators to have an option.”
He said that only time will reveal whether it becomes a source of leverage.
Democrats, meanwhile, have seen legislative leadership put the kibosh on several of their plans, like a long-term property tax relief bill from Rep. Jonathan Karlen, D-Missoula. They’ve attacked the GOP’s rebate plans as rushed, irresponsible and regressive. Investments that Republicans have proposed to address the state’s needs, Democrats have criticized as insufficient.
According to Abbott, the coal trust plan is a demonstration of cautiousness and prudence in handling public funds.
Lynch maintains that his bill is a beneficial proposal and as the appropriations process unfolds, he believes that there is space in the budget to accommodate both his coal-trust booster and the investment priorities of the Democrats.
Welborn admitted to being in favor of the eight-pack, but emphasized that every constituent he has spoken to agrees that investing surplus money in savings is a wise decision.
Welborn questioned if there was any other project in Montana that could provide as much long-term benefit to the people, while also saving money and ensuring safety and transparency, regardless of the individuals involved on the second floor.
The bill languished after introduction for a week without a scheduled hearing. That just changed — it’s now headed for a hearing in the Senate Local Government Committee on Feb. 27. To stay alive, it’ll have to pass out of committee and win approval in the Senate before the transmittal deadline on March 3 — a tall order.
Lynch made a mental note of the committee referral.
“They’re attempting to deceive me,” he stated in a text, emphasizing that it bears no relation to the local government.
According to Abbott, the reason behind the prolonged delay in the bill’s progress is due to a deliberate strategy by the leadership. They are not in favor of the bill passing but believe that the significant support from Republican lawmakers might make its passage possible. To create a situation where the bill is impossible to pass, they have intentionally postponed the hearing, resulting in an unmanageable deadline.
She expressed her belief that the number of Republican cosponsors might have an impact on its outcome. She confidently stated her belief that it would successfully pass through the Senate.