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Energy

Eastern Montana County Reevaluates Finances Following Coal Upheavals

200131.coal_alexanderg_flickr.jpg
Alexander G
/
Flickr
Picture of coal, taken April 7, 2020

Another round of coal mine layoffs is scheduled to take effect Monday in southeast Montana, the part of the state most dependent on coal revenue.

This is the most recent in a string of hits to the coal industry, Big Horn County’s largest tax base.

The Decker coal mine just a couple miles north of the Wyoming border officially lost 59 employees Monday. Decker mine’s owner, Utah based LightHouse Resources, filed for Chapter 11 bankruptcy in December. The company in documents cites poor market prices as a primary factor.

Kimberly Fjell works at the local post office in Decker.

“On my morning commute out here, there are bankruptcy auction signs for some of the land,” Fjell says.

February’s layoff, along with a layoff in December, means a total 145 Decker mine employees have lost their jobs there over the last few months, down from about 170 employees last year. LightHouse Resources did not reply to YPR’s request for comment.

Big Horn County, home to the Decker mine, isn’t just dependent on coal. It’s possibly the most dependent in the western United States.

Mark Haggerty with Headwaters Economics says that’s what he found when he crunched some numbers for a client a few years ago.

“When you compare the total amount of revenue from coal to the county government’s budget, it’s about 69 percent,” Haggerty says.

Big Horn County and its school district receive production taxes and royalties from coal. County Commissioner Sidney Fitzpatrick says for years coal revenue kept county residents’ taxes down.

“Now that’s gone,” Fitzpatrick says.

He says coal revenue propped up a number of different county services like public building repair, and residents are now footing most of the bill for ambulatory care and the sheriff’s office.

Fitzpatrick says the county will need to establish a number of governmental funds that it didn’t have to worry about when coal was more profitable.

“Now we have to start thinking of creating a fire district and looking at surrounding counties, how there’s a cost approach fee, a rule addressing fee, a cattle guard install fee,” Fitzpatrick says.

The county is also waiting on millions of dollars left in flux after the past years’ coal mine bankruptcies.

Decker mine owner LightHouse Resources owes roughly $5 million to Big Horn County, according to the county treasurer.

Nearby Spring Creek Mine’s former owner, Cloud Peak Energy, went bankrupt in 2019 and passed along its mines and debts to the Navajo Transitional Energy Company, which is still paying off a $11 million debt it inherited, according to Big Horn County. NTEC in a statement says it’s confident in its business plan.

Fitzpatrick has been commissioner for more than a decade and says he saw the decline of the coal industry approaching.

“But it came fast, it came quick,” he says.

Fitzpatrick says Big Horn County’s economic outlook is unchartered territory, and commissioners are still figuring out how to provide services.

“Our work’s cut out for us,” Fitzpatrick says.