(The following story by Mike Dennison appeared on the Great Falls Tribune website on April 13.)
HELENA, Mont. — Once again, the state’s dominant railroad said Tuesday that it will sue the state if the Legislature adopts a tax bill aimed at forcing Burlington Northern-Santa Fe Railway to reduce it grain-shipping rates in Montana.
“No other property taxpayer is required to pay property taxes on this basis,” BNSF tax executive Alec Vincent told the Senate Taxation Committee. “We would have little choice but to file suit if this bill is enacted.”
The railroad made the same threat last month during House hearings on House Bill 703, which ties railroad property taxes to its shipping rates for agricultural commodities, or grain.
HB703 says if a railroad charges higher grain-shipping rates in Montana than it does outside the state, then its property taxes in Montana will be raised accordingly.
The House approved the measure 65-35 last week. The Senate Taxation Committee took no action on the measure Tuesday.
Farmers and farming groups have complained for years that BNSF, which has a near monopoly on shipping grain to out-of-state ports, charges higher rates here than it does in neighboring states.
Rep. Bob Bergren, D-Havre, the sponsor of HB703, said he hopes his bill won’t raise the railroad’s taxes a dime.
“We’re not asking for the lowest possible rate,” he said. “We’re only asking for fairness.”
BNSF’s unfair rates have taken millions of dollars out of Montana’s farm economy, hurting agricultural communities across the eastern part of the state, Bergren said.
He dismissed the railroad’s claim that his bill amounts to a discriminatory tax.
“Discrimination?” Bergren said. “You bet it’s discrimination, and it’s against us.”
Vincent said the tax would violate federal law that forbids discriminatory taxes on railroads.
Pat Keim, BNSF’s director of government affairs in Montana, said that grain rates are relatively high in Montana because shipping grain is a risky business, and that the railroad absorbs the risk on millions of dollars of investment in rail cars and engines.
Higher property taxes would be passed on to consumers, thus raising rates already said to be too high, and a punitive tax would discourage the railroad from investing in railroad infrastructure in Montana, he said.