The Federal Communications Commission standard for broadband download speed is 25 megabits per second. According to a report published by the FCC in 2017, about half of Montanans have access to the minimum speeds.
Sen. Jason Ellsworth, R-Hamilton told the Senate Taxation Committee Tuesday that businesses in rural areas suffer without high-speed internet. He said installing new fiber optic cables, which would offer much faster internet speeds, to reach these remote places is necessary for economic growth.
“How do we keep Montanans employed here? How do we keep business chugging along, how do we keep them growing?” Ellsworth said. “This is the way. I mean, this is the future. At the end of the day, without fiber, without high-speed internet, our brick-and-mortar businesses will no longer be brick-and-mortar businesses.”
Ellsworth is sponsoring Senate Bill 239, which would give property tax breaks to companies installing new fiber optic lines for the next ten years.
Geoff Feiss, general manager of the Montana Telecommunications Association, said Montana has an average of three households per mile, and it costs about $30,000 per mile to install a fiber optic cable.
“That’s a lot of money. That’s a lot of fiber. That’s a lot of dirt,” he said.
Rose Bender with the Montana Budget and Policy Center opposes the bill. She said it isn’t just a tax break, but a tax shift to already burdened homeowners.
“Cutting the property tax for fiber optic facilities would result in other taxpayers paying more property taxes,” she said. “In the last two decades, the share of property taxes falling on the backs of individual homeowners has risen from 30 percent in 1994 to over 48 percent today.”
According to the bill’s fiscal note, the state would lose about $8 million to the state general fund over the next four years from the tax exemption.
The bill had nine supporters and four opponents during its public hearing Tuesday. The committee did not immediately vote on the bill.
Tim Pierce is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Greater Montana Foundation and the Montana Newspaper Association.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.