Montana coal-mining tax is a revenue bonanza

In this time of generally declining state revenues and increased operating costs, the state of Montana may become the envy of its sister Western states - it expects to end the year with a $50 million surplus. Much of this could come from its 30 percent severance tax on the gross value of mined coal, the highest tax rate of its kind in the United States.

Emphasis on coal as an alternative to oil has increased activity in the state's coalfields, which contain an estimated 120 billion tons of recoverable coal reserves, more than in any other state.

Since 1975, when the state replaced its old cents-per-ton coal tax with the present regulation, revenues have piled up to establish a $100 million trust fund. Interest from this fund was used recently to improve Montana highways - but special use of these funds requires a three-fourths vote of both houses of the legislature.