Since the mid-1990s the Montana legislature has granted a tax holiday to oil and gas producers. They pay a tax of only 0.5 percent of the production value for the first 12 months of production on all wells and 18 months on oil and gas from horizontally drilled wells. When the holiday ends, the rate will go up to 9 percent.

This tax holiday is a disaster for communities trying to manage the impact of increased oil and gas drilling. We’ve seen what a quick increase in drilling does in the Bakken. Increases in crime, prices, traffic, and pressure on infrastructure transform these communities to the detriment of everyone.

The tax holiday keeps these communities from getting the revenues they need to deal with increasing pressure on law enforcement, human services, health care, road repair and other key services.

It’s a simple proposition. Why provide these incentives to oil and gas companies if you’re going to ruin the communities affected by the drilling? The tax savings during the first year of drilling — when production and profits are greatest — isn’t going to make a difference in the number of wells drilled and production of those wells. It just creates profits for oil and gas companies at the expense of local communities.

The legislators in Helena who are making these decisions aren’t anonymous. They’re the members of the State Senate Taxation Committee, which voted 7-5 along party lines to continue the tax holiday last March. Senators voting against ending the tax holiday include:

Bruce Tutvedt, Kalispell, Chair, 406-257-9732
Fred Thomas, Stevensville, Vice Chair, 406-370-4001
Ron Arthun, Wilsall, 406-220-0399
Jeff Essmann, Billings, 406-534-3345
Jim Peterson, Buffalo, 406-374-2277
Janna Taylor, Dayton, 406-849-6096
Art Wittich, 406-599-9836

If you oppose subsidizing oil and gas companies at the expense of Montana communities, let them know. You’re not alone. A recent survey of Montana citizens shows 72% want to shut down the oil and gas tax holiday.