Governor Vetoes SB249: “No Tax Breaks for Large Companies”

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On Wednesday, Gov. Steve Bullock vetoed Senate Bill 239, a proposal that would have created a 10-year property tax abatement for installing new cable for high-speed internet and cell phone service, reported KPAX. The Governor said the bill would create a tax break for corporations, “to do things they’re already doing in Montana.”

Proponents of the bill believed it would encourage bringing high-speed broadband to underserved, rural areas in the state, reported KPAX.

The bill’s sponsor, Sen. Jason Ellsworth said he was surprised by the veto. “I think it’s a missed opportunity for the people of Montana,” said Sen. Ellsworth. “And we can’t address it for another two years. … It just puts us further behind.” 

According to SB239, any new fiber-optic or coaxial cable installed in Montana after July 1, would be exempt from property taxation for five years. During those five years, property taxes on the cable would start at 20 percent of its value the first year and increase another 20 percent each year until it reaches 100 percent, a phased approach, reported KPAX. The bill also stipulated that companies couldn’t qualify for the abatement unless they reinvested the savings in additional fiber installation within two years.   

Bullock said in his veto message that the state’s, “limited budget does not have room for additional tax breaks like these, that only benefit the largest companies.” After a fiscal analysis of the bill, Bullock’s administration estimated costs totaling $600,000 within the next two years and additional charges in years to come.

“Senate Bill 239 does not promote build-out in rural Montana any more than existing tax exemption programs do,” Bullock wrote. “The supporters of this bill should use existing tax-abatement programs to assist with the build-out of fiber-optic and coaxial cable projects.”

May 10, 2019

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