Mine Tax Dispute Delays Tax Bills in Stillwater County

By Linda Halstead-Acharya, Billings Gazette, Mont.

Nov. 5–Christmas gifts may not be the only expense Stillwater County residents will face this December. There’s a good chance they’ll also be paying their taxes — a month late this year.

“I’m just kind of in a holding pattern,” said Stillwater County Treasurer Carol Rice, explaining that the delay comes as the result of a tax dispute between Stillwater and Sweet Grass Counties. For more than a year and a half, both counties have argued the distribution of taxes on ore mined from under Sweet Grass County but extracted through Nye in Stillwater County.

Taxes on the ore in question are currently tied up in an injunction in district court, making it impossible for either county to accurately calculate its taxable value. And that value is the basis for levying mills and setting budgets.

In a typical year, county officials know the county’s taxable value in August, set their budget accordingly and have tax bills out by the end of October, Rice said.

This year, Stillwater County officials waited, hoping that they’d reach some resolution with Sweet Grass County. But, with no end in sight and several issues still mired in litigation, they decided to go ahead.

Plans now call for setting the budget next week and having tax bills out by late November. Should that timetable stand — and that depends on all steps in the process flowing smoothly — tax payments will come due 30 days later, just about Christmas time.

“I feel bad people will get their taxes then,” Rice said. “I hope they will set that money aside.”

Meanwhile, Sweet Grass County officials took a different tact. They set their budgets some time ago without including the disputed taxes. Tax bills there have already been sent out.

In spite of the taxes being held, Sweet Grass County Commissioner Lloyd Berg said that county’s taxable value is about the same as last year’s.

Between production at the East Boulder mine being up and new construction in the county, “it’s just about made up the difference,” he said.

Should the dispute eventually lead to a favorable ruling for that county, Berg said they would look at it as a surplus.

As Sweet Grass County Commissioners cross their fingers for a “surplus,” Stillwater County Commissioners are wringing their hands over budget cuts.

“The budget will reflect the absence of that mine tax money,” said Stillwater County Commissioner Dennis Hoyem. “The bottom line is, what our department heads will be appropriated will be significantly less.”

How much less remains to be determined. Last year, the first year that taxes on the disputed ore went to Sweet Grass County instead of Stillwater, Stillwater County Commissioners figured they were shorted about $350,000.

This year, with the matter still tied up in court, the commissioners don’t know what to expect.

“Some (undisputed tax) was given to them (Sweet Grass), some was given to us and some the state is holding because they don’t know what to do with it,” Rice said.

Even Stillwater Mine doesn’t know what it owes. John Beaudry, in charge of public affairs for SMC, said as of early this week, the company had not received notification on taxes from the Department of Revenue.

“Typically, we’d have received that by now,” he said.

But the company did receive a legal brief recently. The brief suggested the mine, for the first time since the dispute began, might be drawn into the discourse. A petition filed Sept. 29 by Sweet Grass County Attorney Patrick Dringman lists a number of allegations leading up to the current situation. Among them is one count claiming that Stillwater Mining Company did not submit Nye’s Hard Rock Mine Impact Plan to Sweet Grass County in accordance with statute.

“That’s the first we learned of it,” Beaudry said. “But the company hasn’t received anything from the court.”

Representatives from both counties say they believe the dispute belongs before the Hard Rock Mine Impact Board — rather than district court. But each county believes it’s up to the other county to make the first move.

“It’s not Sweet Grass County’s position to ask for tax base sharing,” Dringman said. “It’s our ore.”

Stillwater County Attorney John Petak counters that position.

“Stillwater County has spent 20 years following Montana codes to the best of its capability,” he said. “They (Sweet Grass County) want to get the money without showing the impacts.”

As one county prepares its budget and the other waits for taxes to roll in, both hope for favorable rulings on a web of complex issues.

“There’s so many briefs and motions,” said Hoyem, flipping through a large notebook of court documents pertaining to the dispute. “But there’s nothing brief about this.”

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