Constitutional amendment to revise investment restrictions of coal trust fund
If enacted, SB 152 would significantly alter the investment strategy of Montana's coal severance tax trust fund, potentially increasing the pool of investable assets and diversifying the state's revenue sources. By enabling investment in private corporate stock, Montana aims to bolster returns on the coal severance tax fund, which could enhance funding for public services tied to this revenue stream. This amendment could make the fund more responsive to market dynamics, fostering a more aggressive investment approach that aligns with contemporary financial strategies.
Senate Bill 152 aims to amend Article VIII, Section 13 of the Montana Constitution to allow a portion of the coal severance tax trust fund to be invested in private corporate stock. Currently, the investment of public funds in private corporate securities is generally prohibited, but this bill seeks to introduce flexibility within the law to enhance potential returns on investment. The bill mandates that no more than 25% of the coal severance tax trust fund can be invested in these private stocks. The proposed changes will be submitted for a vote to the qualified electors of Montana in the November 2026 general election, contingent on an affirmative two-thirds roll call vote from the legislature for passage.
The sentiment surrounding SB 152 is mixed, reflecting a robust debate among stakeholders. Proponents argue that allowing investments in private corporate stock is essential for maximizing returns and adapting to a changing economic landscape. They view this as a progressive step towards modernizing Montana's investment portfolio. Conversely, opponents express apprehension about investing public funds in potentially risky corporate equities, emphasizing the need to preserve the conservative investment framework currently in place to protect taxpayer interests.
A notable point of contention lies in the perceived risk associated with altering the investment guidelines for the coal severance tax trust fund. Critics worry that investing in private corporate stock could expose public funds to volatility and market risks, which could ultimately affect public services dependent on the performance of this fund. Supporters counter that existing safeguards—such as the cap on the percentage of investment—mitigate these risks, and that the potential for increased returns justifies the proposed changes, indicating a fundamental clash of values between cautious financial stewardship and the pursuit of higher yielding investments.