Associated Press reported that Musselshell County commissioners on Monday turned down a requested tax break for an underground coal mine that would have cost the county between USD 7.5 million and USD 10 million over the next five years.

The unanimous vote by commissioners denied 50% abatement on the coal proceeds tax sought by executives from Signal Peak Energy.

Signal Peak, jointly owned by two Ohio companies, bought the struggling Bull Mountain mine south of Roundup two years ago. About a half-billion dollars have been sunk into a mine expansion, creating more than 200 jobs, but Signal Peak has struggled to turn a profit.

Commissioner Larry Lekse said that his cash strapped county could not afford to give up potential tax revenues that could total USD 10 million by 2015. Musselshell County's annual budget totals about USD 6 million.

Mr Lekse said that "All our services have been pretty much cut to the bone because of budget constraints. Fifty percent is a lot to ask for."

Gov Brian Schweitzer had supported the tax break, dispatching his economic development chief, Evan Barrett, to Musselshell County several times to promote its adoption.

Mr Barrett expressed disappointment with the vote, saying it could dent Montana's image as a place open for business to the coal industry. He also said it would have amounted to USD 7.5 million, less than originally anticipated.

Mr Barrett said that "Anytime you can help an enterprise get through those first difficult years. The better off you are as a community, and the better off we are as a state in terms of people looking at Montana and wanting to do business here."

He added that there was little chance the outcome would cause Signal Peak to scale back operations.

There also were questions about Signal Peak's eligibility for the abatement program.

(Sourced from Associated Press)