Coal Is 'Significant Source Of Revenue' For Montana, Says New Report

Jan 2, 2018

While coal production is down nationwide, a new report says it still brings a lot of money to Montana. 

Calling it a “significant source of revenue,” A new state legislative report says coal brought nearly $81 million to state and local governments in 2016.

A coal severance tax made up nearly four percent of Montana’s total tax revenue. That’s a little less than what the state brought in from taxes on cigarettes.

The report was produced for the Environmental Quality Council, a group of lawmakers and members of the public. They were tasked by the 2017 legislature with investigating the environmental and economic impacts of reducing or eliminating coal production in the state.

Montana is the nation’s sixth largest coal producer.  But from 2008 to 2016, less expensive natural gas, cheaper renewables and environmental lawsuits drove the state’s coal production down by nearly a third.

However, the coal severance tax remained relatively stable because it isn’t based on the amount of coal dug up from the ground. Instead, it’s based in part on the contract sales price, which has risen over the past two decades.

The report’s author, Legislative Services Division Office of Research and Policy Analysis Director Sonja Nowakowski, says she’ll present further findings on the financial impact of coal in Montana to the Environmental Quality Council on January 17th.