Calumet Montana Refining has requested a new tax abatement from Cascade County.
The abatement request would apply to about $6.1 million of equipment that came online in 2024.
Calumet filed the application with Cascade County for the abatement allowed under a section of state law that was amended by the 2023 Legislature, which includes renewable fuels as an eligible abatement.
The city and county approved tax abatements for Calumet in 2022.
Under the law changes, only the county has the authority to make the decision though it will impact city and state tax revenues; the abatement cannot be denied and county commissioners are only able to determine whether the abatement is 80, 90 or 100 percent.
Great Falls Public Schools will receive a set dollar amount, as they do annually, but if Calumet’s taxes are abated or reduced through appeals, that tax burden shifts to remaining tax payers to reach that set dollar amount set under state school funding formulas, according to county and school officials.
Calumet requesting new tax abatement from Cascade County on $6.1 million of equipment
County Commissioner Joe Briggs told The Electric in February that the county has to publish a hearing notice on the abatement request within 60 days of receipt and must take action within 120 days of receipt or it is automatically granted at 100 percent.
The statute under which Calumet was granted abatements by the city and county several years ago allowed a maximum of a 50 percent abatement in the first year.
Under the new abatement statute Calumet is seeking, after the first five years, the abatement reduces by 20 percent of whatever the commission approves each year until it’s reduced to zero by the 10th year and then the equipment is taxed normally.
City Commissioners do not have the authority to decide the abatement under state law, but discussed the request during their March 4 work session.
City Manager Greg Doyon said that that the city was notified in February of Calumet’s abatement request.
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The city requested a joint meeting with the county, knowing they didn’t have authority on the decision, but the county said as some county commissioners were traveling and the timing of the process, there wasn’t time for a joint meeting.
County Commissioners invited the city to provide comment on the request and participate in the county’s public hearing on the request, which is scheduled for March 11.
The total impact to the city, Doyon said, over the 10 year lifetime of the abatement is:
- an estimated $226,139 at the 100 percent level
- an estimated $205,320 at the 90 percent level
- an estimated $182,508 at the 80 percent level
Doyon drafted a letter to county commissioners asking them to approve “only the minimum allowable reduction (80 percent) to protect critical public resources and infrastructure.”
City Commissioners informally approved the letter during their work session that would be provided to the County Commission.
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County commissioners had received the letter by the time they held their work session on March 5.
Doyon said among the reasons for supporting the minimum allowable abatement are the city’s public safety needs, Calumet’s pending tax appeal and associated financial uncertainty, the city’s previous approval of an abatement and discussions of the rail expansion project that will impact city property and public access.
Calumet has two pending tax protest cases at the Montana Tax Appeal Board as well as an appeal of the Montana Department of Environmental Quality decision not to certify the entire Montana Renewables facility as tax exempt.
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In 2016, city commissioners unanimously denied a tax abatement to Calumet citing concerns about the impact to the city’s general fund and public safety needs. That abatement request would have been an estimated $6 million loss of city property taxes over the 10 year period.
In 2022, commissioners approved a tax abatement for Calumet that is an estimated loss of $2.8 million over 10 years to city tax revenue.
Commissioners unanimously approved that abatement, including Rick Tryon, Joe McKenney and Susan Wolff. Eric Hinebauch was a city commissioner at the time and is now a county commissioner.
During the May 2022 discussion of the approved tax abatement, Tryon said that Calumet’s tax protest several years ago, “kind of put us in a bit of a bind. I just hope that we don’t have to go through that again.”
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Calumet protested their 2017 taxable value from the state that was set at $538 million.
The county tax appeal board lowered the taxable value to $312.5 million. The Montana Department of Revenue appealed that decision to the state.
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The protest was settled in 2020 and the city lost about $4 million in tax revenue over that three year period, according to the staff report.
The current protests equate to about $1 million annually in tax revenue that is unavailable to the city, according to city finance staff.
Currently, Calumet is working with BNSF for a rail extension near the refinery that would impact city access to the wastewater treatment plant and West Bank Park.
The expansion “presents an infrastructure challenge that may require significant investment” from the city and “may eliminate the only existing public road access” to the wastewater plant that will require construction of a new route, with preliminary estimates of up to $5 million, “a burden that would largely fall on the city. Given that Calumet’s growth will require new infrastructure solutions, it is reasonable to expect the company to contribute some additional tax revenue toward these costs-something that would not be possible under a 100 percent or 90 percent abatement,” Doyon wrote in the city’s letter to county commissioners.
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In an email, Lerna Kent, BNSF’s general director of public affairs, told The Electric that the three parties met recently to discuss safety issues related to the public access crossing at 4th Street Northeast.
The 1975 agreement between the city and BNSF doesn’t allow the at-grade crossing at 4th Street to be used as a public crossing, according to BNSF.
They also “discussed the safest way to maintain access at 4th Street to the water treatment plant given plans being considered for additional tracks and rail activity at this location,” Kent told The Electric.
Doyon told The Electric that initially, during a meeting between the three parties, a BNSF representative said that under the current access agreement, BNSF could terminate the access if the city allowed it to be used as a public crossing.
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The agreement allows BNSF to close the 4th Street access point with 30 days notice.
Doyon told The Electric that BNSF and city public works are reviewing the cost of installing suitable access gates to meet BNSF safety requirements as well as other options that would be agreeable to all parties.
“Considering the critical nature of community domestic and industrial wastewater treatment, it would be in everyone’s interest to find a reasonable solution to addressing safety concerns at the crossing while also ensuring access to the wastewater treatment facility,” Doyon told The Electric.
City Commissioner Rick Tryon was frustrated that the county commissioners didn’t meet with them on the request.
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“I think it’s really disappointing that the Cascade County Commission would treat the city commission with that kind of disrespect and it’s unfortunate that we can’t find a way to work closer with the Cascade County Commission on issues like this,” Tryon said. “They have not been very cooperative…don’t seem to want to have any relationship with the city.”
Tryon said he thought it wouldn’t be a big deal for county commissioners to sit down and discuss the matter with them to build consensus.
“That they didn’t do that is to me a slap in the face and I don’t appreciate it,” Tryon said. “I just think it’s petty that they wouldn’t meet with us. I think it’s petty and uncalled for.”
City staff has a March 14 meeting scheduled with county commissioners to discuss the city’s growth policy and the Malmstrom resiliency study.
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City Commissioner Susan Wolff repeated her comments from the commission’s Feb. 4 work session that when she was working at a community college in The Dalles, Oregon and Google asked for a tax abatement, that community leaders met with them to discuss their expectations and that Google became a community partner.
Locally, “our public safety if impacted” through tax abatements, she said during the March 4 meeting.
The max impact of about $226,000 over the decade’s lifetime of the abatement at the 100 percent level, might not seem like much, Wolff said, but impacts the city’s finances.
“I would be more inclined to support the 100 percent if I saw that Calumet was giving something back,” Wolff said. “We need to see some support in this community. You’re a major employer in this community.”
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She said she sees other major employers out supporting the community and “I don’t see Calumet anywhere. “It bothers me a lot that I don’t see the recognition of or the importance of supporting the community in which your employees live and which your profits come from.”
Commissioner Joe McKenney said an opportunity was lost by not having a joint meeting with the county commissioners.
He said that Calumet employs many in the community, who then pay taxes and spend money in the community, but those income taxes don’t support local government.
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The property taxes from homeowners are light compared to what industry pays, McKenney said.
McKenney said he’s thrilled that Calumet is here and the city needs more companies like Calumet.
“We get a little irritated when they ask for these things because we’re so reliant” on their property taxes, McKenney said, but they forget Calumet is a top property tax payer in the city.
He said instead, they should get mad at other major employers in town that don’t pay property taxes since they’re nonprofits.
McKenney said that the city is on a starvation diet for property taxes and there’s the possibility of the city trying again for a public safety levy.
“How in the world do we ask homeowners to do a little more if we do an abatement, even if it’s justified, even if top taxpayer. We just can’t,” McKenney said. “If the choice was zero, as much as it pains me, I would say zero knowing that we have to ask our community, possibly for a small tax increase in the future.”
But since that’s no an option under the law, he said he also supported the minimum allowable amount of 80 percent.
Mayor Cory Reeves said that the city doesn’t have a say in the decision, “but I truly hope [county commissioners] consider our recommendation.
During their March 5 work session, county commissioners briefly discussed the abatement requests.
The county commission’s work session are essentially agenda setting meetings rather than in-depth discussion of issues.
The county commission will formally consider the abatement request during their regular meeting on March 11. They’ll conduct a public hearing on the request and take public comment before voting.
Trista Besich, county finance director, said that the abatement will be “impactful to all of the taxing entities.”
For the county, under the abatement, the county would only collect the following in property taxes from Calumet:
- $3,958 at the 80 percent level
- $1,979 at the 90 percent level
- $0 at the 100 percent level for the first five years of the abatement
