Why Are We Letting Outsiders Benefit?

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There is an old economic joke: a region can sit on a mountain of wealth while its residents struggle to pay their bills. Economists call it the “resource curse.” Colonial Africa experienced it when foreign powers hauled away gold, minerals, and other riches, leaving local populations with the scraps. Some American resource-producing communities like Montana, face a similar problem: corporations extract the wealth, while locals inherit environmental risks, battered roads, and boom-and-bust economies. Apparently, you can live on top of a gold mine and still be broke!

The problem isn’t resource extraction itself. Mining, drilling, and energy production create jobs and supply essential materials. The problem arises when profits leave Montana faster than a vacationer discovering Montana real estate prices. Out of sate corporations collect the rewards while communities shoulder infrastructure costs and other consequences. Then the boom ends, the jobs disappear, and politicians explain that government needs more money. Funny how the resources were valuable enough to haul away but somehow not valuable enough to leave taxpayers better off!

Wyoming and Alaska chose a different approach. Through severance taxes, royalties, and investment funds, they capture part of the wealth generated by extracting finite natural resources and put it to work for their residents. Imagine that: when companies profit from a state’s natural riches, the public gets a meaningful share. What a revolutionary concept! Somebody might want to alert our legislators instead of raising property taxes, taxing Social Security, and pondering adding a sales tax!

Wyoming uses mineral wealth to help keep taxes down. A portion of its severance-tax revenue goes into the Permanent Wyoming Mineral Trust Fund, whose investment earnings help support state government. Wyoming has no personal or corporate income tax, and resource revenues help fund education, infrastructure, and public services. It isn’t a tax-free paradise, but it demonstrates how natural wealth can reduce the burden on residents. Why send taxpayers another bill when the ground beneath their feet is already generating wealth?

Alaska takes the idea further by sharing the proceeds directly. Its Permanent Fund invests a portion of the state’s oil wealth, and eligible residents receive an annual dividend. Children qualify, too. Payments vary from year to year, but the principle is simple: citizens should benefit from their state’s natural endowment. Alaska hasn’t eliminated taxes or government headaches, but it has created a direct connection between resource wealth and the people who call the state home. Imagine a government program that actually puts money into citizens’ pockets!

And then there’s Montana. We have valuable minerals, oil, natural gas, coal, timber, and other resources. Yet residents face rising property-tax pressures, expensive housing, and mounting infrastructure needs. Montana already collects some resource taxes and maintains trust funds, but are we capturing enough of our natural wealth to benefit the people who live here?

We should seriously study the Wyoming and Alaska models. Montana could strengthen long-term investment funds, dedicate appropriate revenue to roads and infrastructure, and use sustainable investment earnings to help relieve property-tax burdens.

Montana shouldn’t have to choose between responsible resource development and protecting its taxpayers. We can welcome businesses, create jobs, safeguard the environment, and insist that a fair share of our resource wealth stays here. Wyoming and Alaska demonstrate that resource-producing states can do more than watch the profits disappear.

Why should Montana be where the riches come from while everyone else enjoys the dividend? The people of Montana developed this through the effort of our people who put blood, sweat and tears into Montana to create it!  We have the resources. We have the opportunity. Now we need the political will to turn our buried treasure into lasting benefits for Montanans—not merely another shipment of wealth headed somewhere else.

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