Reduction in Coal Production Has Far Reaching Impacts

In a recent article written by Tom Lutey of the Billings Gazette, Bud Clinch of the Montana Coal Council reports that Montana coal production has already dropped about 4 million tons compared to the same January – April time period last year.  If that trend continues, many government programs that received funds from coal tax collections will be impacted.  According to the news article “The latest coal severance coal tax projections from the Montana Department of Revenue has the coal tax collections through May down $7 million when compared to the collections a year earlier.

Montana coal severance taxes, which amount to roughly $60 million a year, split between the state coal trust and several government programs that receive the coal taxes directly.  The trust is a $1 billion that contributes interest to pay for some government programs, such as infrastructure and economic development.

The non-trust proceeds were about $30 million last year.  Some organizations rely on those funds, for example, Montana state libraries, which draws about $470,000 a year it, say they’re feeling the decline.  The library system uses the coal money to pay for database services, for example Lexi-Nexis.”