Federal Actions Threaten Montana’s Way of Life

Montana is a vast state with a landscape populated by great mountain ranges, crystal clear lakes, and vibrant ecosystems – we are known as Big Sky Country for a reason.

Amid all this biodiversity, there is an abundance of natural resources that have long provided energy to Montana’s homes and businesses and generate millions of revenue for our communities annually. However, recent federal proposals on oil and gas leasing and taxes are jeopardizing the benefits that the energy industry brings to Montana, and potentially affecting the way we live and damaging the livelihoods of workers across our state.

As a born and raised Montanan and a current member of the Montana House of Representatives, I am concerned about the energy approach that is being pursued by federal officials. I was disappointed to see the Keystone XL pipeline being canceled which, along with the temporary suspension of state oil and gas drilling permits, has cost our state millions and reduced our country’s energy independence. I am also concerned about the federal government’s proposals to raise taxes to raise funds for infrastructure – in particular the increase in corporate income tax from 21% to 28% and the global low intangible tax income (GILTI) from 10.5% to 21% – because they are Changes that Americans could put at risk businesses at a time when they need support and no additional financial burden.

In terms of state oil and gas leasing, which enables energy companies to responsibly extract resources such as Montana natural gas and oil, it provides vital energy and revenue to communities in every corner of our state. In Montana, nearly 30% of our land is owned and administered by the federal government. According to the Home Office, Montana had nearly $ 25 million in state oil and gas revenues last year. Overall, oil and gas revenues account for 5.6% of our general fund budget, which provides funding for education, health and conservation programs.

However, an analysis by the University of Wyoming estimates that a ban on oil and gas drilling in the state of Montana would cost $ 100 million in lost revenue and over 600 jobs by 2024. Crises in our country’s history cannot be our state afford to lose those reliable jobs and important income. Passing a permanent federal leasing ban, or even introducing further restrictions on the program, would cause problems for Montana’s communities that rely on the energy industry for jobs and finance.

Additionally, the proposed changes to corporate and GILTI tax rates threaten to put a greater financial burden on recently reopened Montana stores and businesses, potentially undermining our state’s economic recovery from the coronavirus pandemic. A study published by the non-partisan tax foundation shows that workers “bear between 50% and 100% of the corporate tax burden, with 70% or more being the most likely outcome”. It did so after researchers observed an “inverse correlation” between corporate taxes and wages.

The increase in the GILTI rate is also problematic for Montana’s workers and companies. This tax is designed to keep the profits of American multinationals in the United States. At the current rate of 10.5%, it has effectively reduced incentives for US companies to invest overseas and has increased domestic employment at US multinational corporations by 2.1% since its inception in 2018 for both unintended economic consequences American businesses as well as workers and could reduce domestic employment.

It is important that federal energy policies, especially natural gas, do not negatively impact economic development and growth in energy countries like Montana. Oil and gas extraction supports a wide variety of jobs, suppliers, and communities in Montana – they would suffer if poorly thought-out tax and leasing measures continued to weigh on the industry.

Our elected officials must be smart and conscientious in their approach to energy development so that Montanans and other Energy State residents do not feel the worst unintended political consequences. A feasible political balance must be found between the federal government’s infrastructure and climate goals and the operational reality of the energy industry.

Matt Regier is a Republican representative from Kalispell.