The Policy Institute, based in Helena, Montana, blends authoritative research and hands-on political engagement to create public policy based on economic justice, fair taxation, corporate accountability and environmental responsibility.

Fair Taxation

"Tax" is Not a Four-Letter Word: Ideas for a More Progressive Taxation System in Montana

Following a 2009 study by the Institute on Taxation and Economic Policy, a Washington, D.C., research group, director Matthew Gardner said, “No one would ever design an income tax with lower tax rates for the best-off taxpayers. But that is exactly what Montana’s tax system overall does. In other words, Montana has an unfair, regressive tax system.” Read more

How Montana and Neighboring States Tax Electrical Transmission

Montana is widely recognized to have enormous potential – particularly from the state's wind and coal resources – to produce electrical energy for regional and national consumption. The development of new electrical production in the state faces constraints, however, including an existing transmission infrastructure of limited capacity. As a result, proposals for several new interregional electrical transmission lines are currently under consideration. Because the implications of large transmission projects are numerous, sizable, and enduring, it is imperative that Montanans and other interested citizens understand the proposed projects and their likely impacts. Read more

The Implications of Transmission Line Tax Rates

In 2005 and 2007, the Montana Legislature established lower property tax rates and a tax abatement for transmission lines that carried power generated by alternative energy sources (wind, ethanol, biomass, geothermal, et al) and were built after June 1, 2007. What are the tax implications of those changes? Read more

Wyoming Tax Formula Creates Massive Fund, Not Industry Exodus

One of The Policy Institute’s priorities in the 2009 legislative session has been the repeal of Montana’s oil and gas tax holiday, which has cost the state more than $500 million in revenue since 2003. In "Montana’s Oil and Gas Tax Holiday: Analysis and Recommendation for Change" (here), we report that, according to recent academic studies, production tax rates have little effect on industry investment and activity. In fact, location of reserves is the major factor influencing energy companies, along with price, access to markets and technology. In the past and throughout this session, oil and gas industry representatives have offered neither substantive rebuttal to these studies nor evidence to the contrary. Read more

Montana's Oil and Gas Tax Holiday: Analysis and Recommendation for Change

Over the past 30 years, the Montana Legislature has steadily reduced the tax responsibility of the oil and gas industry in the state, and decisions by the 1999 Legislature alone reduced tax revenue to the state and counties by hundreds of millions of dollars in subsequent years. The most influential of tax reduction methods has been the oil and gas tax "holiday," which discount tax rates on new wells for defined periods of time. Read more

State EITC Would Add Fairness to Montana's Tax System

In 1989, one of the best reasons for celebrating Montana's hundredth birthday was the state's progressive tax system. It generally expected residents to support public services based on ability to pay, neither oppressing low-income Montanans nor demanding excessively from the wealthy. Read more

Summary - Oil and Gas Tax Holiday

History: (oil and gas tax changes over past 20 years; highlights only)

- 1987/HB 776: Legislature exempted oil and gas production for first two years of production, as long as oil price < $25/bbl. Also exempted small-volume stripper oil and gas wells from severance tax and reduced tax on larger-volume stripper wells. Both exemption and reduction in place with oil < $30/bbl. Read more

Endless Holiday?

A recent article in the Great Falls Tribune addressed the tax "holiday" on oil and gas production in Montana. Because that policy has an enormous impact on the state budget - and represents an enormous injustice in Montana's tax system - the subject deserves further analysis. Read more

Don't Burn Up the General Fund

Firefighting, as observed repeatedly during the recent special session of the Montana Legislature, ain’t what it used to be. But how firefighting is paid for in the state budget is what it used to be, and the disparity has created a growing virus of subsidy in the state’s tax system. Read more