Dear Senator Tester

At the forefront of our recovery from the economic fallout caused by the COVID-19 pandemic is the Biden Administration’s $2 trillion-plus American jobs Plan. It’s an ambitious proposal meant to create jobs, strengthen infrastructure, and position the U.S. to compete globally – ultimately, putting Americans and our communities back on strong financial footing.

However, there are pieces of the President’s plan that, while well-intentioned, will ultimately prove detrimental to the financial well-being of small businesses and local communities across Montana and the rest of the nation. Specifically, increasing the corporate tax and the Global Intangible Low-Taxed Income (GILTI) rates. Under the tax plan, the Biden Administration has proposed increasing the corporate tax rate from 21% to a staggering 28% and the GILTI rates from 10.5% to an untenable 21%.

Of course, increasing taxes on America’s largest, multi-national companies is a tried -and-true talking point, but as organizations representing Montana’s bankers, businesses, and contractors, we know that in reality, corporations wouldn’t be the ones paying for these taxes.

Small businesses and their employees who are at the heartbeat of local communities would feel the largest impacts of these tax hikes whether it be via a direct tax or passthrough. In fact, history shows that workers bear between 75% and 100% of a corporate tax hike since it restricts businesses from increasing job growth and wages.

As a fierce advocate for Montana businesses and our economic recovery, it is imperative that you work with your colleagues in Washington to find less harmful solutions than tax hikes that have been proven time and time again to hurt the people they are meant to help. Saddling our businesses with extra tax burdens while attempting an economic recovery does not help get Montana’s workers, families and communities get back to their feet – it only knocks them back down.

Montana needs you to fight for smart policies in Congress – ones that both pull us out of the pandemic and put us on a path to recovery. We hope you will not compromise economic stability and advancement by raising corporate and GILTI taxes.

Cary Hegreberg, President and CEO of the Montana Bankers Association

Todd O’Hair, President and CEO of the Montana  Chamber of Commerce

David Smith, Executive Director of the Montana  Contractors Association

Joe Kola has joined Stockman Bank as market president of Stockman’s new bank scheduled for construction next year in Whitefish.  This new bank will be Stockman’s first in the Flathead Valley, and its 37th full-service banking location in Montana. Kola will oversee Stockman’s entrance into the market and supervise all phases of staffing, lending, operations, planning, and development of the Flathead market. 

Kola brings 22 years of banking experience to the position, serving most recently as market president for a multi-state bank in Kalispell. He started his career on the teller line while attending the University of Montana’s School of Business Administration, earning a bachelor’s degree in finance followed by an MBA. After college, he worked as a credit analyst, then as a commercial relationship manager, a commercial group manager, and finally as a market president. He has worked in Missoula, Whitefish, Jackson, Wyoming, and most recently in Kalispell.  Along the way, he attended Pacific Coast Banking School, graduating with honors, and completed Leadership Wyoming (Class of 2015). A Kalispell native, he returned “home” in 2019 from Wyoming.  His wife, Tracy, is also a Kalispell native and their twin boys will attend Glacier High School as freshmen this fall. 

 “We are excited to welcome Joe to the Stockman Bank family,” stated Jeremy Morgret, Chief of Branch Supervision for Stockman Bank. “His experience, and deep-rooted knowledge and understanding the Flathead Valley will be key for us as Stockman enters this new market.”

 “While Stockman already has many customers in the Flathead Valley, we look forward to serving more of our neighbors throughout this beautiful region of our state,” added Bill Coffee, CEO of Stockman Bank. “We will soon have a temporary banking office for Joe and his future team and will begin construction of a new state-of-the-art banking facility in Whitefish next year. We are confident our unique brand of Montana community banking will bring more options and a higher level of customer service to the Flathead Valley.”

The KLJ Solutions Holding Co., parent organization to KLJ Engineering LLC (KLJ), and its Board of Directors has announced Eric Michel, as the organization’s chief executive officer (CEO). Michel fills the gap left by previous CEO Barry Schuchard, who passed away in March of this year. “It’s really an exciting time at KLJ. Eric brings a combination of extensive industry experience and an enthusiasm for growth to this role,” said Dan Bayston, Vice Chair of the KLJ Solutions Holding Co. Board of Directors.  

Michel brings decades of construction, engineering, and leadership experience to the role. In joining the nearly 85-year-old company, he also brings enthusiasm for the firm and the industry, having previously spent time with the company as the Vice President of Energy and Natural Resources. He received a bachelor’s degree in electrical and electronics engineering from North Dakota State University. He will locate out of the company’s Saint Paul, Minn. office.

Janiel Olson recently joined RBC Wealth Management as a Financial Advisor. RBC Wealth Management financial advisors assist individual and corporate clients in selecting appropriate investments including stocks, taxable and tax-exempt bonds, options and mutual funds. They also assist clients with wealth plans, retirement plans and goals-based planning.  Janiel graduated from Montana State University Billings (MSUB) with a Bachelors in Business Management and Masters in Healthcare Administration and was a member of the MSUB basketball team.  Janiel was born and raised in Billings, where she now lives with her husband.   

Trade and tourism across the Canadian border is a very important part of Montana’s economy, which means the border closure over the past year has been greatly detrimental to our economy.

Governor Greg Gianforte, the governors of Idaho and North Dakota, and the premiers of two Canadian provinces have called on U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau to immediately open the border between the two countries.

On Wednesday, July 21, the U.S. Department of Homeland Security announced it was extending its temporary restriction prohibiting non-essential cross-border travel from Canada through at least August 21.

In response, Gov. Gianforte, the governors of Idaho and North Dakota, and the premiers of Alberta and Saskatchewan urged Biden and Trudeau to work together to reach an agreement allowing for the immediate movement of citizens, goods, and tourists between the two nations.

“Our relationship is one built on mutual respect and friendship. As we continue to manage the COVID-19 pandemic and work together on joint initiatives to provide vaccinations to more and more of our citizens every day, the time has come to allow our citizens to move safely and securely across our shared border,” the leaders wrote in a letter to Biden and Trudeau.

Gov. Gianforte and Alberta Premier Jason Kenney have worked together to combat the pandemic. In addition to encouraging Montanans to get the free, safe, and effective COVID-19 vaccine, Gov. Gianforte announced on May 7 that Montana and Alberta signed a Memorandum of Understanding whereby Montana would provide vaccines to Albertan commercial truck drivers and their families at a rest stop near Conrad, Montana. On May 20, the governor visited the vaccine clinic off I-15. Over the course of four weeks, Montana administered 1,235 vaccine doses at the clinic.

The U.S. governors and Canadian premiers concluded their letter to Biden and Trudeau, writing, “Our two nations, and the states and provinces along our shared border, have a long history of secure, safe and free flow of goods and services across the border, as well as citizens traveling between our countries for business, shopping and tourism. We request our federal governments return to this symbol of friendship once again by securely opening the northern border.”

Governor Gianforte signed the joint letter with Idaho Governor Brad Little, North Dakota Governor Doug Burgum, Alberta Premier Jason Kenney, and Saskatchewan Premier Scott Moe.

The Center Square

Federal Reserve Chairman Jerome Powell tried to calm lawmakers’ fears about rising inflation but also said it would probably remain elevated for months to come.

Testifying before Congress, Powell said the Federal Reserve was willing to step in to address the situation, but that inflation should level out next year.

“As always, in assessing the appropriate stance of monetary policy, we will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal,” Powell said in his prepared testimony.

“In addition, we are continuing to increase our holdings of Treasury securities and agency mortgage backed securities at least at their current pace until substantial further progress has been made toward our maximum-employment and price-stability goals,” he added. “These purchases have materially eased financial conditions and are providing substantial support to the economy.”

Powell’s testimony comes on the heels of troubling news of a major spike in inflation. The Bureau of Labor Statistics released federal data showing the largest one-month spike in consumer prices in more than a decade.

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in June on a seasonally adjusted basis after rising 0.6 percent in May…” BLS said. “This was the largest 1-month change since June 2008 when the index rose 1.0 percent. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.”

That data was the latest in months of troubling economic reports that drove lawmakers to press Powell. Despite Powell’s push for calm, many Republicans were not convinced.

“Democrats’ socialist stimulus is already causing skyrocketing inflation and trillions more in wasteful spending would only make it worse,” Mike Berg of the National Republican Congressional Committee said.

Inflation, though, is not the only economic indicator worrying economists. Elevated unemployment despite widespread job availability has led Republican governors around the country to push back against supplemental federal unemployment benefits passed by Congress earlier this year. The payments, $300 weekly on top of state unemployment benefits, have made it easier to stay at home than return to the workforce, according to Republicans.

The Senate, the upper house of Czech parliament, has approved the right to use arms to defend oneself and others under legal conditions to be embedded in the constitution as a reaction to the EU’s pro-regulatory stance on firearms acquisition and possession.

The amendment comes as a reaction to a petition signed by 102,000 people, including a number of top elected officials. It was launched by hunters and other arms owners in reaction to the European Commission’s effort to limit the possession of arms, including legally possessed ones.

This right was included in the Senate-proposed amendment to the Charter of Fundamental Rights and Freedoms, which is part of the constitution. Senators, therefore, passed the amendment as expected.

Based on the amendment, the Charter of Fundamental Rights and Freedoms will include a new article saying that ‘the right to defend one’s own life or the life of another person even with the use of a weapon is guaranteed under the conditions set by the law.’

According to the authors of the bill, this constitutional change will prevent the right to bear arms from being restricted by common law and will strengthen the position of the Czech Republic in the debates on further EU regulations.

Now President Milos Zeman must sign it into law. The president cannot veto a constitutional bill against common pieces of legislation.

Every year billions of dollars go up in smoke as the West battles forest fires. Every year that’s between $10 billion and $20 billion federal dollars.

A recent issue of PERC Reports claims that such losses are unnecessary and the reason it’s so high is a mix of perverse incentives for property owners and local governments, complicated regulations, overlapping bureaucracies, ineffective strategies that continue to get funding, and poor policies.

“Wildfires are getting bigger and more devastating, and muddled incentives are making a bad situation worse. The root of the problem is the idea that the federal government will show up virtually anywhere, anytime, to ty to put out wildfires, regardless of the cost or effort required,” states the article “When the Government Makes Wildfires Worse,” written by Tate Watkins, a fellow at PERC (Property and Environment Research).

PERC is a Bozeman-based think tank founded in 1980, which focuses on property rights, markets and innovation to encourage environmental stewardship.

Watkins makes the point that “government wildfire policy often seems to promise the wrong kind of help, given how much of the spending aimed at putting out large fires is ineffective. Even if there’s been little appetite to reform the blank check approach to fighting wildfires, various private actors are taking matters into their own hands, from companies providing insurers with sophisticated risk models, to financial innovators decreasing the likelihood of catastrophic fires breaking out in forests, to individual residents deciding to make their homes more firewise.”

PERC advocates for regulatory reforms and for other innovative approaches that would expand and expedite forest restoration and reduce fire risks.

Bureaucratic obstacles need to be “flattened,” and communities need to be better positioned to invest in forest management themselves, the article recommends.

Wildfires have become such a problem, even political adversaries like Sens. Dianne Feinstein (D-Calif) and Steve Daines (R-Mont.) have reached across the aisle to get more done to proactively manage forests. They have co-sponsored a bill to speed up efforts to decrease fire risks such as prescribed burns and mechanical thinning.  Their aim is to streamline such requirements and cut red tape that the Endangered Species Act sometimes imposes.

Federal spending in fighting wildfires has doubled over the past decade and grown fivefold since the late 1990s. Unrestrained spending is a philosophy that signals to residents that its “perfectly fine to build and live in fire-prone areas.” It encourages high-risk choices increasing the potential for catastrophe.

For over 50 years there has emerged a philosophy, including that of the federal government, that all forest fires should be put out no matter what— not always a good policy. “….fire is often a positive force…” Fire is sometimes necessary for some species to rejuvenate.  Timber owners in the Southeast have understood this fact and have routinely carried out controlled burns as part of managing their timber.  But states the article, “Decades of suppression have left many western forests choked with dense stands of small-diameter trees, underbrush, and other growth,” contributing to high fire risks in the West and “partially accounts for why wildfires in the west are getting worse over time.”

Before 2000, wildfires destroyed a few hundred structures in the US each year. From 2000 to 2010 that rose to between 3000 and 4000 structures annually. In 2018 nearly 25,000 structures burned.

Economic damage has been surging year after year – now totaling between $10 billion to $20 billion annually.  In 2020 fires in the West – especially California, Oregon, Colorado and Washington, killed 47 people and cost $3.6 billion in suppression efforts and caused $16 billion in damages.

Fires are no longer considered a seasonal issue, but a concern year round.

The biggest reason for an increase in fires is that people are building more homes in “harm’s way.” They encroach more and more into areas at greater risk. By 2010, “wild-land-urban interface” areas had more than 43 million homes in it. The expansion doesn’t just put more property at risk but the human activity increases the risk of fires.

PERC economists – Dean Lueck, Indiana University and Jonathan Yoder, Washington State University —  report that the “federal government has essentially had a ‘blank check’ to suppress wildfires since the 1908 Forest Fires Emergency Act. They describe wildfire fighting today as a ‘highly structured, hierarchical, military style’ effort.”

“This network comprises a bewildering array of laws, policies, and contracts that crate a complicated mix of incentives and outcomes,” they claim, which result in inefficiencies in the system that often make suppression efforts ineffective.

For example, tanker drops of fire retardants have little effect on large fires, as do “backfires,” but still the tactics continue to be funded. In many cases, the cost of suppression far exceeds the value of the protected resources.

The situation is one in which, “…Homeowners don’t pay for the government’s all-out efforts to put out fires and protect their lives and property; tens of millions of taxpayers do.”

“Prices contain information,” states the article.    

The government’s expenditures are “implicit subsidies to property owners,” which can be more than 20 percent of a home’s value. “In Montana and Idaho, the subsidies exceed the total value of the federal transfers to those states for the Temporary Assistance for Needy families program.”

The subsidies also undermine incentives for property owners to take preventive actions such as reducing undergrowth that fuels fires or to use fire resistant building materials or for local governments to enforce codes for defensible space regulations. They likened the policies regarding wildfire to those created by federal flood insurance.

The government’s policies create “distorted incentives.” They reduce the cost of insurance premiums for home owners, who if they had to pay the cost for the real risks, might find their choices less affordable and less desirable.

It was further pointed out that most of the subsidy benefits do not fall to low income citizens but they actually subsidize the high income.

The significance of “price signals” are lost on California, where in 2018 the state legislature prohibited insurance companies from cancelling or refusing to renew policies for up to a year after a wildfire emergency. “Choosing to risk having your home destroyed by a wildfire is one thing. But other policy holders or even taxpayers shouldn’t be forced to subsidize you to take that risk,” states the article.

 Recommendations made by Lueck and Yoder includes two reforms: one, to let more fires burn more widely, especially in areas where few structures are at risk and to concentrate resources on protecting life and property… and two, to set funding at a base level and to let agencies “bank” unspent funds from year to year, which would encourage homeowners and insurers rather than “far-flung taxpayers” to foot the bill and support incentives to make better decisions.

Other actions that could be taken to try to reverse the situation is to reduce ignition risk and to limit the intensity of wildfires when they do break out, such as prescribed burns and selective harvesting.

The author concedes that there are often much political and environmental opposition to such efforts and “when they do get off the ground bureaucratic and legal obstacles often limit their scope.”

The Center Square

Airports throughout the West are experiencing a shortage of jet fuel complicated by supply chain issues and a need for firefighting aircraft to battle raging wildfires in several states.

State and federal lawmakers in Nevada say they are investigating a possible shortage of jet fuel that could greatly impact the Reno-Tahoe International Airport in the coming days, delaying cargo delivery and passenger travel.

The Reno-Tahoe airport, Nevada’s second-largest metro area, is slowing operations because a lack of jet fuel could potentially restrict the delivery of essential goods into the northern part of the state, a popular gambling and outdoors destination near Lake Tahoe.

On late Saturday, Nevada Gov. Steve Sisolak, U.S. Sens. Catherine Cortez Masto and Jacky Rosen, and U.S. Rep. Mark Amodei issued a statement expressing their concern.

“To be clear, further failure to secure adequate fuel supplies is unacceptable,” they said. “We are currently speaking to all responsible parties to understand how this situation occurred and prevent future shortages, but our immediate focus is on ensuring resources to combat Western wildfires are not impacted and that there is as little disruption as possible for Nevadans and visitors who depend on reliable air service.”

The Reno-Tahoe Airport Authority said the airport’s jet fuel shortage was partially caused by not having enough tanker truck drivers to deliver fuel. A spokesperson said, “There’s just nobody available to drive the trucks of fuel in here,” adding that it was hard to predict how long the shortage would last.

Lack of fuel shortage is also complicated by construction at the airport. Because its longest runway also is under construction, planes are limited by how much extra fuel they can carry on inbound flights because the heavier the plane, the longer stopping distance it requires.

Other western states are feeling the pain as well.

Flight delays have already been reported at Bozeman Yellowstone International Airport in Montana, and at the Fresno Yosemite International Airport in California, popular tourist and vacation destinations.

In Wyoming, Gov. Mark Gordon authorized truck drivers to work longer hours to deliver fuel to help firefighting aircraft.

The Montana Department of Livestock is still concerned about feral swine entering the state. The department recently issued an alert that as the feral swine population continues to grow it is bringing a high risk to Montana.
The state isn’t seeing much activity right now but there has been an increase in sightings in surrounding areas and the Department is asking everyone to be aware.
Nationwide it is estimated that there is over six million feral swine, and Montana is seeing an uptick along the high-line, as Canadian officials are reporting expanded ranges of these swine just north of the border.
Feral swine carry diseases that can negatively impact livestock, people, and wildlife, which is why the MDOL is telling people to watch out for specific signs.
According to state law, feral swine includes any hog, boar, or pig that appears to be untamed or in a wild state.