Established by a vote of the people in 1976, 50 percent of the coal tax is set aside in a permanent Coal Tax Trust Fund for the benefit of future generations. Once the coal is gone, what will we have to show for this valuable resource that once existed in the Treasure State? While the income is available each year, it takes approval of three-fourths of each house of the Legislature to spend the principal.
Every Republican governor has been hell bent on busting this trust. Despite their rhetoric, Republicans can never seem to find enough money to spend. Just imagine their frustration; a big pot of money and they can’t spend it. Republican candidate for governor Rick Hill is no exception.
His education policy statement states, “The Hill Administration will place a referendum on the ballot to allow the people of Montana to cap the coal trust for ten years.” He proposes to use the funds to finance infrastructure improvements including school buildings. Whether you cap the trust and use the principal for 10 years or 100 years, it is still busting the trust to get at the principal.
First, Hill apparently thinks he can avoid the three-fourths vote requirement by amending the Constitution with a mere two-thirds vote of the Legislature and a vote of the people. But is this really something that should be put into the Constitution?
Second, the Treasure State Endowment already does exactly the same thing. All of the income each year from this fund, currently $242 million, is available to local governments for infrastructure improvements. It is a very popular program.
Third, with interest rates so low, there really is no need when money can be obtained so cheaply by bonding.
Fourth, it is a very bad precedent. If we busted the trust for every worthy cause, there soon would not be any principal left. That is exactly what has happened to every other trust fund that is not constitutionally protected.
And fifth, Republican candidate for governor Jack Ramirez had the exact same proposal 32 years ago and it was rejected.
Hill’s idea to cap the trust is a very bad idea. It steals from future generations for the hope of a few votes.