Making tourists pay

Montana State Roundup

Published September 1, 2006  |  September 2006 issue

Billings officials want to expand the state's resort tax to apply to tourism-oriented purchases in the Magic City and just about every other community in Montana.

Under present law, only cities of fewer than 5,000 can enact a resort tax, and tourism must account for a "major portion" of local economic activity. Towns that collect voter-approved resort taxes include West Yellowstone and Red Lodge. Draft legislation being discussed by elected officials and business leaders in the Billing area would allow communities of any size that receive "a portion" of their business revenue from tourism to levy a tax on lodging, restaurant meals and other typical purchases by tourists.

Yellowstone County's Economic Development Authority believes that the 2007 Legislature would be more likely to amend the resort tax than approve a municipal sales tax. The 2005 Legislature shot down more than a dozen sales tax bills.

Phil Davies


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The Bonneville Power Administration sells some of the cheapest electricity in the country, thanks to its reliance on 31 federal hydroelectric dams in the Northwest. And the price of power from those dams and one nuclear plant—the source of juice for about 400,000 Montanans—keeps going down. In July the nonprofit agency proposed a new wholesale rate for 2007 of about $27 per megawatt-hour—about 3 percent less than current rates. It's the fourth year in a row that BPA has cut its rates.

An anticipated surplus of hydroelectric power and increased efficiency allowed BPA to lower its projected rates this winter. In addition, Bonneville recently introduced a flexible rate program that lets it pass along short-term rate increases to public utilities. Stable cash flow reduces the amount of cash reserves BPA must carry, reducing operating costs.

The final BPA rate, effective Oct. 1, will depend in part on how many wholesale buyers agree to pay adjustable rates. It's up to local utilities to decide whether homes and businesses in BPA's western Montana service area will also see reduced rates this winter.

Montana Congressman Denny Rehberg and other lawmakers from the Pacific Northwest put pressure on BPA to keep rates low. Inexpensive electricity in the region has stimulated economic development and job growth.

Phil Davies