Originally published in the 3/23/18 print edition of Yellowstone County News.
BILLINGS — Tax abatements awarded by the City of Billings and the County of Yellowstone over the past few years will generate an $8 billion direct and indirect economic impact on the community based upon the salaries of the jobs the new business growth created.
In an annual report to county officials regarding the status of the tax abatement program and the companies that have received tax relief through it, Patrick Klugman, senior project manager, Community Development for Big Sky Economic Development, highlighted the three companies that received abatements in the 2016-17 fiscal year. They were Home2Suites by Hilton, Billings Flying Service and Heights Eyecare. Two of the businesses expanded and one, Home 2Suites, was new.
In total, the businesses invested $17,098,795 in expanding and building their businesses.
Klugman explained that the tax breaks allow the companies to put more money into their facilities or to hire more employees at higher wages.
Besides the three tax abatements granted in 2016-17, there are about 30 others on the books at various stages in the programs. In total, they represent almost $600 million in capital investment, provide almost $200 million annually in payrolls resulting from their expansions, and they experienced about $500,000 in tax savings in 2016.
In looking back at seven companies whose abatement projects expired in 2016, Klugman calculated that while they invested a total of about $167 million in capital improvements, the total increment of increase in those property values was over $385 million for a total market value of almost $959 million. In total, the seven companies experienced a $7.7 million savings; their ending general tax bills totaled about $15 million, almost double that of their beginning general tax bills.
The Tax Abatement Program was initiated by the Montana State Legislature in 1988, giving local authority to cities and counties to use the program to attract new businesses and to help existing businesses expand.
Yellowstone County adopted the five-year tax abatement program… Read full story in print or by subscribing here online.
