This week's Revenue and Transportation Interim Committee (RATIC) was dominated by a bombshell memo written by the legislature Principal Fiscal Analyst Terry Johnson (see page 2, under Issues, #2 for the good stuff).  According to Johnson, the administration did not use "generally accepted accounting principles" to determine state revenues for this fiscal year - resulting in an over-estimate of $69 million.  This is significant because without that extra $69 million, the state would not have met the "trigger" contained in HB 9 which designated excess revenue for additional property tax rebates.  You may recall the extra $140 rebates the administration announced earlier this year. 

The significance here, according to the Johnson memo, is that those extra rebates would not have materialized had the administration followed the law in estimating revenue.  In other words, they cooked the books.

We can't complain much.  Giving back excess tax revenue is a good thing.  However, it just underscores the point that we should not be using complicated formulas and triggers to accomplish tax relief - if tax revenues are more than the state needs, we should simply be cutting tax rates to prevent the excess payments in the first place.

The troubling part of this story is the fact that the administration is playing fast and loose with the law.  Where else are they cutting corners and cooking books?  Dishonest, unethical, and underhanded political manipulation has no place in the governor's office, even if it does lead to laudable ends.

See Montana Main Street for more information. 

Pay for Montana university faculty has fallen from 41st to 45th in the nation during Brian Schweitzer's term as governor, according to MEA-MFT union official Erik Burke.  Burke, whose union represents most of the faculty statewide, referred to the pay disparity as a "dirty little secret" in a Bozeman Daily Chronicle story today.

For Schweitzer, who just can't help but constantly compare himself to Governor Judy Martz, this must come as troubling news indeed.

This Missoulian story is a week old, but it just came across our desk today.  According to the Missoula County elections office, of the 42,190 mail-in ballots sent to Missoula voters for last week's city council primary election, more than 11,000 were returned to the elections office as undeliverable.

According to elections deputy Debbe Merseal, the massive return of ballots "shouldn't be a cause for concern."  WHAT?!?

So if 11,000 were returned, how many were mistakenly delivered to addressees no longer living at the address on file in with the elections office?  At my residence, I routinely receive mail for two individuals who I've never even met.  The post office does a fairly good job at delivering the mail, but they're nowhere near 100% accurate.

The Missoula example just proves that the vote by mail scheme promoted by Democrats is rife for election fraud.  How many ballots in Missoula were incorrectly delivered to bad addresses and then voted by someone other than the intended recipient?  We have no way of knowing.

The legislature passed a study resolution last session to prepare a plan for vote-by-mail in statewide elections.  We hope they'll have the good sense to scrap this plan in favor of protecting the integrity of our elections.

The Montana Public Service Commission (PSC) is considering a rule change regarding electricity that the utilities must buy from small producers (primarily wind) that will lead to more expensive electricity for Montana consumers.  Without getting too far into the complexities, Montana has a law on the books based after the federal PURPA legislation that requires utilities (i.e. NorthWestern Energy) to purchase up to 3 mW from small producers called "qualifying facilities."  The rule change would increase that cap up to 10 mW to accommodate for larger wind projects.

Why is this a problem? Because NorthWestern's electricity supply is becoming increasingly unstable as they are backed into more and more wind generation.  You see, wind-generated electricity fluctuates wildly from hour to hour (and even minute to minute) which forces the utility to buy increasing amounts of extra power to make up for the difference. 

Look at it this way, if all that wind energy wasn't included in the portfolio, the utility would not need to buy the extra, backup power.  In essence, the utility is having to buy twice for power that is only used by the consumer once.  According to a document obtained from the PSC, since 2002 NorthWestern has increased by more than $10 million per year the amount of backup power it needs to accommodate the extra wind energy in its system, or 72%. These are costs that are recovered (by law) from the electricity consumer.  (And here we've been taught that only deregulation increases electricity costs!)

And the numbers included in the document do not anticipate the extra power that will come into the system if the qualifying facilities cap is increased to 10 mW.

What's really going on here is a concerted effort to help small wind energy producers get rich quick on the backs of Montana consumers.  Remember, these qualifying facilities do not sign contracts with utilities, they simply supply their power and get paid the top rate.

We do need to make alternative energies like wind power more viable to help reduce our dependence on non-renewable energy, but consumers also have the right to the cheapest available power.  In a previous post we discussed how wind power is subsidised, but that's just one of the hidden costs of wind energy.  The qualifying facilities boondoggle is yet another example.

The legislative Revenue and Transportation Interim Committee (RATIC) has been a contentious subject ever since the regular legislative session adjourned earlier this year.  Democrats on the committee have been resisting the committee precedent that rotates the chairmanship of this committee between chambers and parties.  They'd prefer to give an additional term to Senator Jim Elliot (D-Trout Creek) instead of allowing House Taxation Committee Chairman Bob Lake (R-Hamilton) to assume the chair according to the traditional rotation schedule.

At the last RATIC meeting the main point of contention for the Democrats was the fact that Lake had written a guest editorial criticial of the administrations aggressive stance against Montana taxpayers.  

Hmm.  So if you write opinions about tax policy in Montana you shouldn't be allowed to serve as the RATIC chairman?  By our count, Senator Elliot wrote exactly 20 opinion peices on tax policy during his term as RATIC chairman.  Some of these opinions were highly critical of Republican tax policy preferences.

But we all know that double-standards are nothing new to the Democrats.

The RATIC committee will meet later today in Helena, and the chairman issue is bound to come up.  Let's just hope that the Republicans stick to their guns and prevent Taxpayer Public Enemy #1 Jim Elliot from weasling his way into the chair once again.

Jim Farrell, the notorious attack machine and now former Executive Director of the Montana Democrat Party quietly announced that he and two of his key staff members would be moving on to new positions on Friday. Farrell is heading to Iowa, where he will work as the Deputy State Director for Bill Richardson, and staffers Jessica Rhodes and Chris Laslovich are leaving for jobs with left-leaning organizations in Montana.

The timing of this is a bit curious. If there was going to be a major staff exodus, you would expect it to occur after the last election, after the legislative session, or right after the Party held their officer elections more than a month ago. This comes as no surprise to political insiders in Helena whom have long been whispering of internal dissatisfaction with Farrell's tact and tactics.  It's no secret that Farrell's support base was limited within the party and that many Democratic lawmakers did not approve of his overly-aggressive demeanor and his habit for stretching the truth.

What's more significant is the wholesale departure of the core of the Democratic Party staff, which points to a house cleaning in favor of a new political shop.   

This seems like the kind of tactic we could see from the Governor, who’s been labeled as a bully for years, even by members of his own party. Or perhaps this comes at the behest of Max Baucus and his political team, who have been long rumored to have issues with Farrell in his stint as Executive Director. Whatever the case, this doesn’t smell like a week when all the key democrat staffers just decided on a new career path. It’s clear the Democrat Party in Montana is in disarray and that there is some behind the scenes feuding within the party that will no doubt impact their performance in the 2008 elections.

Though Montana is losing out in the cutting edge technologies of alternative energy (i.e. coal liquefaction and gasification, and clean coal-fired generation), we are making some progress in wind-generated electricity. The Cut Bank Pioneer Press reported last week that progress is being made on the McCormick Ranch wind project north of Great Falls.  This is great news from the area as they stand to reap benefits of new jobs and an improved tax base.  However, there's one small problem; this project is currently slated to send all of it's generation to Alberta through a to-be-constructed transmission line from Great Falls to Lethbridge.

As it stands, wind generation is only economically viable due to heavy subsidies from the federal government in the form of the Production Tax Credit, which chips in $18 for every Mega Watt hour (mWh) produced.

Assuming a typical efficiency factor of 37% on the 300 mW the McCormick wind farm is currently projected to produce, the Production Tax Credit will pay out subsidies of about $175 million over the next ten years.  In sum, that's $175 million that American taxpayers are going to shell out so Canadian consumers can get wind power at a competitive rate.

Senator Baucus has been instrumental in extending the Production Tax Credit through the Senate, and we applaud his leadership on promoting alternative energy, especially in Montana.  (Making consumer's pay for the higher cost of wind-generated electricity through taxes rather than their utility bills is just a shell game, but we digress...)  However, in this case he's doing American taxpayers a disservice by subsidizing a product that Americans will not benefit from.

Why it makes sense to Senator Baucus that we should be subsidizing Canadian electricity is beyond us.  Perhaps he never contemplated that those environment-hating Canadians would never be interested in alternative energy.  Or maybe it's just another example of old Max asleep at the switch.