On November 8, 2017, Premier Industries held a public meeting in Anaconda to provide information on its proposed $50 million slag reprocessing facility to be built in Mill Creek east of Anaconda. During the meeting, Rick Tabish, Premier’s spokesman, was asked how much local tax the project would pay. He answered “between $200 and $225 million annually.” Those numbers were reported by both The Montana Standard and Anaconda Leader in stories they wrote following the meeting.
Those tax numbers are not credible. In fact, they are preposterous. NorthWestern Energy is the largest taxpayer in Montana. In 2016, it paid $136 million in property tax on an investment of $2.7 billion. Included in NorthWestern’s tax bill is approximately $4.0 million paid in Deer Lodge County for the Dave Gates Generating Station which is literally across the road from Premier’s project site. Gates cost $186 million to build, almost four times more than Premier’s project and yet, Premier says it’s going to pay 50 times more in taxes.
Estimating the amount of local property tax a new industry will pay is relatively simple. You multiply the amount of investment by the taxable value rate set for the applicable classification of property as established by state law. Premier’s plant is a manufacturing facility and most of its equipment will be Class 8 property, whose effective taxable value rate is 2.814% for a project of that value. The product of that multiplication is then multiplied by the local mill levy and divided by a thousand because a mill is one thousandth of a dollar.
The calculation for Premier’s project is shown below:
$50,000,000 Proposed Capital Investment
x .02814 Taxable Value Percentage
$1,407,000 Taxable Value
x 676 Mill Levy in Mill Creek TIFD
$951,132.00 Estimated Property Tax
With a $50 million investment, the most Premier is going to pay in local taxes is $951,132.00 per year. Over time as the plant depreciates, tax payments will decline. For Anaconda-Deer Lodge County, a $951,000 increase in tax revenue is a good shot in the arm, but it’s only 4 tenths of one percent of what Premier represented to the public.
Pardon my skepticism, but when the spokesman for an industrial enterprise isn’t remotely close to accurately estimating the property taxes the company will pay, I have to wonder how many other representations Mr. Tabish made at the meeting which were less than one percent correct.
-- John S. Fitzpatrick, of Georgetown Lake and Helena, is an Anaconda native. He holds a bachelor's degree from the University of Montana, and a master's degree and doctorate degree from Ohio State University. He worked on the team that did permitting for Colstrip Units 3 and 4, and the 500KV transmission line. He was deputy budget director for state of Montana under Gov. Tom Judge, and then established a consulting business. He has worked in the mining industry, and also permitted coal mines, metal mines, electric transmission lines and subdivisions. He was responsible for permitting the David Gates Generating Station at Mill Creek, Beal Mountain Mine near Fairmont, and Montana Tunnels and Basin Creek in Jefferson County. He also has extensive experience with legislation.