HELENA - Gov. Brian Schweitzer, in his State of the State address tonight at the Capitol, proposed a new $44 million tax on oil-and-gas production to fund higher teacher salaries in the state.
"These dollars from oil production would be used directly to increase teachers' salaries, but Montana would continue to maintain an energy tax that is lower than Wyoming's," he told a joint session of the House and Senate.
Schweitzer noted that Republicans and Democrats campaigned last fall for higher teacher salaries in Montana, and that many Republicans said the state should be more like Wyoming in using oil-and-gas revenue to pay for schools.
"I think it's time to turn those promises into action," he said.
But what he didn't say in the speech is that the proposal will raise state production taxes by $1 a barrel on oil and 8 cents per thousand cubic feet of natural gas produced in Montana.
Instead, he said only that Montana's production taxes would still be lower than those in Wyoming.
The proposal, contained in a bill introduced today by Rep. Kendall Van Dyk, D-Billings, would be the first broad-based tax increase proposed by Schweitzer, who has maintained a no-new-taxes pledge since winning election in 2004. He was re-elected by a wide margin in 2008.
The measure would generate some $44 million a year, based on current production figures, and most of that money would be dedicated to school districts to raise teacher salaries.
Schweitzer also used the speech to implore Republicans to help resurrect a bill setting ground rules for carbon sequestration in Montana, saying it's needed to encourage coal development over the long term.
Republicans on a Senate committee voted to kill the measure last week.
"I ask the six Republicans who tabled this bill: Think about the future," he said. "Don't stop thinking about tomorrow. We need this bill passed to compete in the energy world."
The rest of Schweitzer's speech focused mostly on what he considers accomplishments of his first term, as well as spotlighting several proposals he supports this Legislature, such as further cutting the property tax on business equipment and a bill to create access for anglers to streams at bridges.
Schweitzer addressed a packed house in the Montana House Chambers as well as a statewide TV and radio audience. State Senate and House members attended the speech, as did top statewide officeholders and heads of Montana's tribal nations.