Montana Egg LLC seeking city tax abatement

City staff are recommending approval of a tax abatement for the new Montana Egg LLC, but not without careful consideration by the Great Falls City Commission.

Commissioners will consider the proposal on first reading during their Tuesday meeting and staff recommend they set a public hearing for Oct. 3.

Staff has typically recommended approval of tax abatements as an economic development tool, but those requests need to be considered against budget needs, especially in the case public safety needs.

The Montana Egg request would reduce city tax revenue by about $305,000 over the next decade, thought that figure doesn’t include the reduced tax revenue for Great Falls Public Schools, Cascade County or the state.

Last December, staff recommended denial and commissioners voted to deny a tax abatement request from Calumet Montana Refining. The request would have reduced city tax revenue by $6.3 million over 10 years.

According to city staff, fund balances are stabilizing, but some operational needs and capital projects have been deferred.

“These deferred items remain unfunded and there is no other identifiable revenue source other than general fund tax dollars to fill these voids,” staff write in their agenda report. The capital improvement plan, park and recreation master plan and two reports on the Civic Center façade Report all contend that “city facilities suffer from decades of deferred maintenance problems. Operationally, significant public safety needs exist as outlined in prior budget transmittal letters to the commission. Staff finds that approval of this tax abatement application will have a negative impact to the general fund over a 10 year period of time potentially requiring the City Commission to explore alternative revenue sources more aggressively (such as the park assessment district and others) to address identified needs and meet new service requirements for the city,” according to the staff report.

Construction on Montana Egg’s $7 million, 54,600 square foot facility is nearing completion on 38th Street North near the intersection with River Drive North. The group is requesting a New or Expanding Industry Tax Benefit, one of tax abatements allowable by state law.

Under state law, this type of abatement would reduce taxes on improvements for the first five years after a construction permit is issued and each year thereafter, the percentage must be increased by equal percentages until the full taxable value is attained in the 10th year. After 10 years, the property would be taxed at 100 percent of its taxable value.

The Montana Egg project also received a $90,000 loan benefit this year through the city’s Community Development Block Grant program.