(The following article by Gwen Florio was posted on the Great Falls Tribune website on March 31.)
HELENA, Mont. — The only way to deal with the high shipping rates that BNSF charges Montana grain growers is by raising property taxes on the railroad, Rep. Julie French, D-Scobey, told a House panel Friday.
“Montana is a captive state and our partners are captive shippers,” French told members of the House Taxation Committee. With 90 percent of the track in Montana, BNSF has a virtual monopoly, and growers here pay higher prices to ship their grain, she said.
French is sponsoring a bill that would raise a railroad’s property taxes if its fees for shipping agricultural products go above a set threshold. In 2005, Rep. Bob Bergren, D-Havre, pulled a similar bill from consideration after BNSF agreed to discuss rail rates. Those rates eventually were lowered.
“I think we’re negotiating right now, and that’s real good,” said Ken Torgerson, a farmer and rancher from near Sidney, who said he remembers similar complaints about BNSF going back 25 years. “If negotiating doesn’t work, I think that maybe Mrs. French’s bill is real good.”
Alec Vincent, general director of taxes for BNSF, called French’s bill “poor tax policy” — and illegal. He said the bill was unfair because it exclusively targeted railroads.
French said the Legislature’s code commissioner reviewed her bill to ensure that the new tax would be legal.
Mary Whittinghill, president of the Montana Taxpayers Association, also criticized the bill, saying that “we do not believe in targeted taxation for social engineering.”
Vincent also pointed out that tax rates would be compounded yearly under French’s plan.
“We believe it is punitive legislation, which will impact Burlington Northern Santa Fe’s decisions as to where we invest and where we improve our operations,” he said.
The federal Surface Transportation Board is the proper place to settle disputes, Vincent added.
Rep. Ed Butcher, R-Winifred, said that board drags its feet on cases. Recounting one case that took 17 years to settle, he said: “Most farmers are broke or dead by then.”
A 2004 legislative report showed that BNSF charges a higher rate here than in states with more competition, costing growers about $60 million annually. The railroad later lowered its prices by between 3 cents and 4 cents a bushel on wheat headed to the West coast from Montana, Minnesota and the Dakotas, saving Montana shippers up to $6 million a year.
The House Taxation Committee took no action on French’s bill Friday.
To read the full text of House Bill 838, view:
http://laws.leg.mt.gov/pls/laws07/law0203w$.startup