Yellowstone County Commissioners approved giving Phillips 66 a tax incentive on the company’s $289.8 million investment in the oil refinery that has operated in the county for the past 68 years.
The vacuum improvement project, which began in 2015 and was completed in June 2017, improves the refinery’s ability to process crude oil and efficiency in recovering sulfur, while also increasing its capacity to produce gasoline and improving safety, and the refinery’s reliability.
The refinery which has 302 full time employees will increase that number by 18 employees as a result of the upgrades, said Patrick Klugman, who presented Phillip 66’s application to the commissioners at a public hearing recently. Klugman said that the project had a $50 million economic impact on the community while workers were here, and will continue to have an impact in adding to the company’s payroll wages amounting to $2,944,626.
The average wage for the new workers, which included mechanics, engineers, accountants and administrators, is $71.30 an hour. Klugman estimated that the increased payroll will have direct and indirect economic impact for Billings of $6.4 million annually.
Klugman is Community Development Senior Project Manager for Big Sky Economic Development, which oversees tax incentives on behalf of the city and the county.
There were no speakers who opposed the proposal at the hearing, and two representatives from Phillip 66 spoke in support: Chad Polak, a refinery advisor from Denver, and Ryan Wagner, a manager at the Billings refinery.
The tax incentive is one the county commonly grants to new and expanding businesses, but this was the first application granted under a change in state law that gives the commissioners an option of providing either a 50 percent or a 75 percent property tax reduction for five years, with the tax increasing incrementally by 15 percent for each of the next 5 years, until they are taxed at 100 percent valuation. Previously the tax reduction was only for 50 percent. The commissioners granted Phillips 66 the larger deduction.
A requirement of the tax incentive program is that the capital investment exceed $50,000 and that more than 50 percent of sales are out-of-state.