Montana

Oct 4, 2011 8:25 AM by Marnee Banks- KXLH News

Study: New law will decrease revenue for MT education

HELENA- A new study states a recently passed bill will reduce revenue used to fund education in Montana.

Bioeconomics Incorporated conducted a study on how the state calculates its cabinsite lease rates. The state leases about 800 lots around Montana, with the majority of them located in Western Montana.

The state has historically charged leaseholders 5% of the appraised value of the property per year. Senate Bill 409, passed in the 2011 legislative session, sets the rate at a minimum of 2% of market value then the lease goes out for bid and the highest bidder gets the lease.

Bioeconomics reports that the new legislation will lower the amount of revenue the state gets from the leases. The report also states the old way of calculating leases will maximize returns.

However, the bill's sponsor, Senator Bruce Tutvedt (R - Kalispell), carried the bill because he says people were abandoning their leases because they were too expensive.

Bioeconomics reports vacancies are up substantially but data is inconclusive if that is due to the rate.

"The Duffield study [Bioeconomics] is an objective analysis that shows we are not receiving full market value for state cabin leases. Using actual market data from Montana and other states, the study confirms that the minimum lease rate set by the legislature of 2% of market value is artificially low," Governor Brian Schweitzer said.

"That giveaway may work for politicians who want to hand out favors to their pals who lease lakefront property, but it doesn't work so well for Montana's school kids," he concluded.

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