By Roger Koopman

When Travis Kavulla and I were still serving on the PSC, we often made the point that protected utility monopolies like NorthWestern Energy were dedicated to “privatizing their profits by socializing their risks.”  Profit — based on efficiency, performance and hard work — is a very good thing, that incentivizes every competitive and free enterprise.  But “profit” based on risk avoidance, protectionism and gaming the government system is the opposite of free market economics, and like socialism in general, rewards failure and punishes the consumer. 

HB 99, currently before House Energy, Technology and Federal Relations Committee, would go a long way to fix the perverse, socialistic system of utility monopoly regulation that currently holds sway in Montana, by repealing a terrible, monopoly-coddling process that provides preapproval by the PSC of the generation assets NWE seeks to purchase.  This aspect of utility regulation law literally turns incentive-based market economics on its head, and passes all the financial risk of a utility’s bad decisions and over-payments onto the ratepayer. Worse, current law actually rewards utility monopolies like NorthWestern for knowingly paying too much for an asset, by providing approximately 10 percent net profits for every extra dollar of cost the PSC allows in preapproval. There is no going back.

Most utilities across the nation do exactly what any private enterprise is expected to do: make prudent, business-smart decisions on their acquisitions, based on an extensive process of analysis and due diligence. They then live with those decisions on a risk/reward basis.  But not NorthWestern Energy!    Before they buy anything, they are guaranteed that there will be no risk attached to their decision.  The PSC’s preapproval ensures that all bad outcomes will fall on the ratepayer, while the utility will continue to have its customers cover all costs plus 10 percent.  So where is the incentive for NorthWestern to choose wisely and buy low?  The answer: there is none.

Preapproval is an ancient relic from “deregulation” days, when Montana Power couldn’t own power plants and was getting all its electricity from outside sources.  It has no relevance to the post-deregulation energy marketplace, and yet NorthWestern’s lobbyists have been able to successfully keep it in statute for 14 years since deregulation ended.  The company has become weaker, not stronger, as a result of being artificially insulated from normal business risk.  They continue to successfully socialize the risk through the power bills they send to all ratepayers, while reaping windfall profits on their bad decisions.  Tragically, there are numerous examples of this.

The reason this anti-market, anti-consumer, socialistic statute remains on the books is not because the liberal Democrats embrace it, but because the purportedly conservative, free market Republicans do!  Republicans just don’t get it when it comes to market-based, incentive-based regulation of state-sponsored monopolies like NorthWestern Energy.  For years now, GOP legislators have labored under serious misconceptions about utility regulation and the fundamental difference between risk-overcoming competitive enterprises and risk-avoiding, protected monopolies. 

I keep wondering when the light will go on, and these otherwise conservative Republicans will start reminding themselves of what they say they believe in, regarding freedom versus socialism.  I keep hoping that in the “next session,” Republicans will finally leap over the chasm they created between their free market beliefs and the way they swaddle NorthWestern Energy in a blanket of risk-shifting protectionism.

HB 99 is that opportunity for Republican legislators to take a stand for good, market based economics that not only serves and protects the interests of captive NWE consumers, but also prompts the utility itself to operate as a proud, confident and self-reliant enterprise, willing to assume its own business risks and become stronger and more efficient in the process.  On the energy utility front, it’s time to replace the lose-lose of socialism with the win-win of freedom. 

By Billings Chamber of Commerce, Billings Chamber of Commerce

When we asked our membership last June about policy priorities for the 2021 Legislative Session, Public Safety was in the top 3. It was not a surprise. Anecdotally we hear from members tired of reading about another murder, wondering when we’ll get the meth epidemic under control, and avoiding downtown because of the transients. Unfortunately those concerns aren’t overblown.

Violent crime in Billings increased 115% in the last ten years. A report put together in 2019 for the Substance Abuse Connect (SAC) group, a partnership of providers, law enforcement, and businesses with the goal of addressing addiction issues in Yellowstone County, highlights some other sobering statistics:

—“Substance misuse and abuse are common in the Yellowstone County/ Billings community with more than 4,000 individuals aged 12 years or older dependent on or abusing illicit drugs.”

—”[M]ethamphetamine is the most common drug seized by law enforcement officials in the community.” 

Substance Abuse Connect has made significant progress since its inception to identify our needs and work toward the goals of the 2020 – 2023 Action Plan: (1) increasing our community’s collective impact; (2) improving diversion and treatment; and (3) increasing access to substance abuse prevention.

 In addition to the efforts of SAC, the Downtown Billings Alliance hired a Resource Outreach Coordinator (ROC) to work alongside the BPD Downtown Resource Officers and engage individuals living with substance abuse disorder. Recently, an allotment of beds at the jail were made available to re-institute a highly successful diversion and treatment program used in Billings know as Motivated Addiction Alternative Program. In short, the goal is to move people from addiction, into treatment, and ultimately onto recovery and transformation.

 While Billings has seen some great successes recently, we continue to face issues of capacity and funding. Additional resources are needed to fully combat the drug epidemic we face. Governor Gianforte’s focus on this matter, and his creation of the Healing and Ending Addiction through Recovery and Treatment (HEART) fund can help provide those resources. Using tax revenue from marijuana and tobacco tax settlement monies the governor’s budget invests $23.5 million/year to fund a complete continuum of prevention and treatment in Montana communities.

The Billings Chamber is grateful for Governor Gianforte’s prioritizing addiction issues. Billings has built a great model of cooperation and success. Additional resources from the state will help to fill the gaps we might not otherwise be able to plug. I’m hopeful that before the 2023 Legislative Session, we’ve done enough to combat the drug epidemic and improve public safety that our members no longer list public safety in their top 3 issues.      

House Bill 252, Tax credit for trades education and training, Rep. Llew Jones (R), Conrad

Billings Chamber Supports

One of the issues we hear from industry and trades businesses is a need to balance the emphasis of education between four-year colleges and careers in the trades. Providing a tax credit for businesses to offset the costs of trades education and training is a productive step toward addressing the workforce challenges our trades businesses face. This is incredibly important now, as we recover from a global pandemic that will forever impact our economy. Businesses have found new efficiencies and the evolution of new technologies necessitate continuous education and training across industries. On February 9th, the bill will be heard in House Tax.

House Bill 303, Business Investment Grows (BIG) Jobs Act, Rep. Joshua Kassmier (R), Ft. Benton

Billings Chamber Supports

One of the Billings Chamber’s priorities is to reduce the cost of doing business in Montana. The governor’s Business Investment Grows (BIG) Jobs Act accomplishes that goal. Current law allows a tax exemption on the first $100,000 of business equipment subject to the business equipment tax (BET). The BIG Jobs Act would double that exemption to $200,000, effectively eliminating payment of the BET by approximately 4,000 small business owners. With less spending on the BET, this means more spending in our local communities, benefiting businesses that may not even be subject to the BET. On February 9th, the bill will be heard in House Tax.

Senate Bill 159, Personal income tax relief, Sen. Greg Hertz (R),  Polson

Billings Chamber Supports

This bill reduces the top personal income tax rate from 6.9% to 6.75%, starting in tax year 2022 and applying to taxable income above $18,500. Relative to other western states, our current top income tax rate is one of the highest which can be a barrier for attracting the best and brightest workforce to Montana. While we know tax rates are only one of many factors affecting where people decide to live, our competition has similar outdoor opportunities and quality of life, making the difference in tax rates stand out. And with more money in their pockets, Montanans will spend more with our local businesses. On February 11th, the bill will be heard in Senate Tax. 

Will adding to regulations for businesses who offer massage services help curb illegal human trafficking and prostitution?

The Billings City Council is moving forward with a proposal to impose  more regulations on businesses that provide massage therapy, including an additional business license.

The crackdown is hoped to weed out establishments that pose as legitimate massage therapists as cover for human trafficking and prostitution. The approach uses city code enforcement to stop criminal activity where criminal law enforcement has failed, leaving Billings as having the most incidents of human trafficking of any city in the state.

Discussion about the issue drug the Billings City Council into a long late-hour work session last week. In the end, after listening to dozens and dozens of phone calls, the council acted to place the matter on a formal agenda at some point in the future.

Many legitimate massage therapy businesses objected to being used in the strategy, and expressed as much during the virtual meeting, on phone calls for some two hours. Some of the calls were from massage therapists and others who supported the proposal out of concern about human trafficking.

The proposed regulations place much of the onus of trying to rein in human trafficking — which quite often includes prostitution rings – upon how massage therapy businesses will have to operate in order to avoid being penalized. They will also be required to purchase an additional business license beyond that which they get from the state.

The city will require an additional business license imposing a $55 fee, fingerprinting and background checks for business owners. There are also stipulations regarding how the businesses should function including the requirements for dress, of keeping doors unlocked, keeping regular business hours, having interiors well lighted and high visibility through windows. Violations of these practices impose stiff fines and imprisonment.

Despite many of the callers objecting to the city’s approach, no one disputed the fact that Billings faces a very serious problem because of human trafficking. An FBI Special Agent, Brandon Walter, spoke to the council, saying that about half of Billings’ human trafficking problems stem from perpetrators fronting as massage therapists. Billings has more of a problem with human trafficking more than any other Montana city, and the city has generated a reputation, that extends far beyond the region, as being lax in regard to enforcement, which tends to attract more criminals.

There were many calls from supporters of the heightened regulations saying that they believe what was being required of massage therapists isn’t so onerous and well worth the effort to save the victims of human trafficking.

Many of the massage therapists, however, said they believe the issue is a bigger one for the city and should be addressed on a broader scale rather than focusing on their industry. Many were indignant for having been told by some city officials that they just needed to “take one for the team.”

It’s a matter for law enforcement, not for code enforcement, it was stated.

Enforcement of the regulations will be complaint -driven with code enforcement officers responding to calls. The city lacks the staffing to initiate investigations.

It was stated that the hope is that enforcing the codes will “tip over” into criminal charges.

A couple of callers said that reports from massage therapists in other communities who have followed a similar approach say that it didn’t work to curb the criminal activity. The task force that has worked on developing the new regulation reported just the opposite from the cities they said they had contacted.

City Administrator Chris Kukulski pointed out that the benefit of making it a code enforcement issue that relies upon complaints from citizens is a low cost approach for the city, which struggles with having enough funding to hire the needed law enforcement.

Many of those calling into the virtual meeting voiced indignation at being lumped in with the activities of criminals. They object to being categorized as “adult entertainment” or called “parlors” rather than a health care service or provider, which is how the industry sees itself.

Mountain States Legal Foundation’s newly-established Center to Keep and Bear Arms jumped right into the fray, by moving to intervene in Syracuse v. ATF on behalf of its clients. This case will have profound implications for how the federal government defines firearms as well as Americans’ liberty to self-manufacture firearms for personal use.  

Several progressive-run US cities and anti-gun groups earlier this year sued the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), claiming the ATF violated the Administrative Procedure Act by employing an objective test based on the actual manufacturing process involved to determine if an item is considered a “firearm” under the Gun Control Act of 1968. 

The objects at issue are often colloquially referred to as “receiver blanks,” “frame blanks,” “partially-manufactured frames,” “partially-manufactured receivers,” “80% frames,” “80% receivers,” “unfinished frames,” or “unfinished receivers.” While these objects vary widely, what they all have in common is that they are not “firearms” as defined by the Gun Control Act, nor can they be readily converted into firearms.

Instead, just like a raw block of aluminum in the hands of a machinist, individuals can fully manufacture firearms from these non-firearm objects using their own experience, know-how, and machining equipment. Because they are not firearms, the ATF and the federal government lack any authority to regulate them as such.   

But these cities and gun control activists want to force the ATF to regulate raw materials of all kinds—materials that may possibly be used to manufacture a firearm in the future—simply because individuals, through their own knowledge, skill, and ingenuity, can manufacture them into firearms for personal use.

MSLF is intervening on behalf of our clients, Zachary Fort, Frederick Barton, 80% Arms, and Firearms Policy Coalition, in an effort to preserve the natural right and traditional freedom of self-sufficient Americans to legally build firearms for personal use, free from undue (and unconstitutional) government interference, surveillance, and regulatory control. 

“This case is about defending the ingenuity and self-sufficiency of Americans in the face of the culture of control and dependency that is taking over our Republic,” said Cody J. Wisniewski, Director of Mountain States Legal Foundation’s Center to Keep and Bear Arms. “The cities and gun control activists in this litigation are trying to force their own definition of a ‘firearm’ on the entirety of the United States, thereby instituting federal government control and quashing American’s ability to rely on their own skills and expertise.”

Adam Kraut, Director of Legal Strategy for Firearms Policy Coalition, believes intervention is necessary because the ATF represents its own interests, not those of grassroots gun owners. “For decades, the ATF has enforced a bright-line delineation as to when an object becomes a ‘firearm’ under the Gun Control Act. The plaintiffs in this case seek to pervert that longstanding definition,” Kraut explaned.

“Since our nation’s founding, Americans have self-manufactured their own firearms at home,” adds Zachary Fort, one of the citizens MSLF represents. “The ability to exercise one’s rights privately, without government intrusion, is a cornerstone of a free society. To arbitrarily change the definition of a firearm, to include non-firearm objects, would be a gross overreach of government and could expose Americans to criminal liability.”

Mountain States Legal Foundation’s Center to Keep and Bear Arms is intervening on behalf of our clients in this case in order to ensure that the court hears the voices of everyday Americans, especially those actively exercising the rights that the  cities and gun control activists want to eradicate.

By Bethany Blankley, The Centre Square

The number of individuals who filed for unemployment benefits last week increased to 742,000, the first increase in five weeks, according to new data published by the U.S. Department of Labor.

The number of people who filed for state unemployment benefits in the week ending Nov. 13 grew by 31,000 from the previous week’s revised level of 711,000, according to the Nov. 19 report.

In October, the U.S. gained 638,000 jobs and the national unemployment rate fell to 6.9 percent compared to the near historic high of a 14.7 percent at the peak during state lockdowns, when weekly jobless claims hit a record 6.9 million in March.

he previous week’s unemployment level was revised up by 2,000 from 709,000 to 711,000. The four-week moving average was 742,000, a decrease of 13,750 from the previous week’s revised average, the department stated in a news release accompanying the data. The previous week’s average was revised up by 500 from 755,250 to 755,750.

The unemployment rate drop “can be attributed in part to the fact that a lot more businesses are open now than were a few months ago, as states have gradually loosened restrictions,” Adam McCann, financial writer at WalletHub, says. “In addition, many people who became unemployed during the COVID-19 crisis were temporarily laid off, and either have already been rehired by their former employers or expect to be eventually.”

According to an analysis of unemployment data by the personal finance website, some state’s employment rates have bounced back more than others.

WalletHub compared all 50 states and the District of Columbia across four key metrics. It reviewed the change in each state’s unemployment for the month of October and compared it to data from October 2019 and January 2020. The analysis also compared continued claims in October 2020 to October 2019 and each state’s overall unemployment rate.

States in which employment rates bounced back the most were Iowa, Nebraska, Vermont, Missouri, South Dakota, Montana, Utah, Minnesota, Alaska and South Carolina.

States whose unemployment numbers were still suffering were Arizona, Maryland, Massachusetts, the District of Columbia, New Mexico, New York, California, Louisiana, Nevada and Hawaii.

According to the Department of Labor, the highest insured unemployment rates in the week ending Oct. 31 were in California (8.3), Hawaii (8.3), New Mexico (8.0), Nevada (7.6), Georgia (6.5), Pennsylvania (6.4), Alaska (6.2), Massachusetts (6.2), District of Columbia (6.0), and Illinois (5.7).

The largest increases in initial claims for the week ending Nov. 7 were in Washington (+7,683), California (+5,293), Massachusetts (+3,383), Alabama (+1,704), and Louisiana (+1,626).

The largest decreases were in Georgia (-13,426), Illinois (-6,357), Kentucky (-4,830), Texas (-3,934), and New Jersey (-3,725).

As of November 1, RDO Equipment Co. became a dealer of John Deere compact construction equipment in Billings,  and the surrounding area, the result of an expansion of RDO’s compact construction footprint throughout the state.

As a total solutions provider of John Deere construction equipment and construction technology in Montana, RDO offers sales and full aftermarket support for the full line of compact construction equipment, including skid steers, compact track loaders, compact excavators, and compact wheel loaders. The recent expansion extends the geographical reach for these products from RDO’s five locations in Montana, covering responsibility for the entire state.

“Our team members are dedicated to building lasting relationships that extend well beyond the sale of a machine,” said John Hurd, Billings Store Manager. “The opportunity to meet customers in these expanded areas and help them find the equipment they need to accomplish their work is one we’re very excited about.”

Team members in each of RDO’s Montana locations specialize in the compact equipment line and have expertise in its use across a spectrum of applications, from general construction and landscaping to farm, ranch, and home use.

Founded in 1968, RDO Equipment Co. sells and supports agriculture, construction, environmental, irrigation, positioning, and surveying equipment from leading manufacturers including John Deere, Vermeer, and Topcon. With more than 75 locations across the United States, and partnerships in Africa, Australia, Mexico, Russia, and Ukraine, RDO Equipment Co. is a total solutions provider.

From Center Square

States that enforced Certificate of Need (CON) laws during coronavirus shutdowns increased mortality rates for COVID-19 patients and others, a new assessment of state laws has found.

Montana is among about 35 states that still impose CON laws – laws which require some health care facilities to “prove need” before being allowed by the state government to go into business or to expand business, such as adding the number of beds. Part of that consideration involves protecting existing, both public and private, facilities from competition.

An analysis of state laws, published in a new working paper by economists Agnitra Roy Choudhury, Alicia Plemmons and Sriparna Ghosh at the University of Cincinnati, Auburn University, and Southern Illinois University, concludes that CON laws increased mortality rates for COVID-19 patients and others.

In Certificate-of-Need Laws and Healthcare Utilization during the COVID-19 Pandemic, the authors found that in states with high hospital bed utilization, suspending CON laws saved nearly 100 lives for every 100,000 residents for all causes of death. Suspending CON laws saved 40 lives from COVID-19 and 57 lives from natural causes of death.

In states with high intensive care unit bed utilization, suspending CON laws saved 28 lives for every 100,000 residents for all causes of death, saved 11 lives from COVID-19 and 15 lives from natural causes of death, the report says.

“CON laws are legal limitations to the expansion and acquisition of medical services within a state and were not structured in a way to prepare or stockpile medical goods and services to the volume that has been required to meet demand swells during the recent pandemic,” it states.

The analysis primarily focused on mortality caused by COVID and non-COVID related reasons to assess how CON laws affected access to health care for illnesses that might require similar medical equipment.

“Their baseline results suggest that mortality rates are higher in states with CON laws relative to that in states without any CON laws,” the report states. “States with high healthcare utilization due to COVID that reformed their CON laws during the pandemic saw a significant reduction in mortality resulting from natural death, Septicemia, Diabetes, Chronic Lower Respiratory Disease, Influenza or Pneumonia, and Alzheimer’s Disease in addition to reduction in COVID deaths.

“In states with high ICU bed utilization that subsequently reformed their CON laws in order to increase acquisitions of medical equipment, 11 lives per 100,000 residents [were saved] from COVID weekly,” the report states.

By keeping CON laws in place, health care providers were prevented from expanding care options, the report found, including the ability to add beds, ventilators or expand facilities.

Twelve states do not have CON laws; 15 states and the District of Columbia have CON laws in place; 23 states suspended some portion of CON laws or enabled emergency provisions.

Several attempts have been made to pass bills in the Montana State Legislature to eliminate Montana’s cumbersome bureaucracy controlling the emergence of new health care providers or preventing existing ones to expand, but to date they have been unsuccessful. CON laws protect hospital profits, not patients, in a process that can takes months or even years, Moriah Lawrence and Angela Erickson at the Pacific Legal Foundation, argue.

Lawrence and Erickson charge that state bureaucrats “are so concerned with the potential harm to the existing companies’ bottom lines that this process ultimately creates ‘Competitor’s Veto.’” In Montana government- ran medical facilities have exercised that veto to block private sector companies from entering the market. Hundreds of preventable deaths can be traced back to CON laws, well before the coronavirus, according to a 2016 Mercatus Center report. Mercatus published empirical evidence to show how death rates were higher for patients suffering from pneumonia, heart failure, or heart attacks at hospitals in states with CON laws than in non-CON states.

NFIB, the nation’s leading small business advocacy organization, has presented its most prestigious legislative recognition, the Guardian of Small Business Award, to Montana U.S. Rep. Greg Gianforte.

“The NFIB Guardian of Small Business Award is awarded to lawmakers whom small businesses can truly count on,” said NFIB Vice President of Federal Government Relations Kevin Kuhlman. “These Members of the United States House of Representatives are dedicated supporters of the key issues that our members are concerned about and have proven themselves to be real champions for small business. Our policy positions are driven by our members, and we report NFIB Key Votes back to our membership. We are proud to recognize the elected officials from the 116th Congress who earned this distinction by taking pro-small business votes supporting financial assistance programs and tax relief and opposing new regulations and increased labor costs. Small business owners across the country need their support now more than ever during these unprecedented times, and we are grateful to these lawmakers for their leadership.”

Added Riley Johnson, NFIB’s Montana state director, “At no time in recent history has small business needed more reliable and steadfast friends in Congress and state legislatures, and without a doubt, Congressman Gianforte has been one. The mom-and-pop enterprises of Montana’s Main Streets are grateful for the support Congressman Gianforte has given them.”

NFIB’s Guardian of Small Business Award is reserved for lawmakers who vote consistently with small business on the key issues identified by small business owners. Those who voted with small business on key issues 70% or more of the time during the 116th Congress earned the NFIB Guardian of Small Business Award. NFIB informs lawmakers in advance which votes will be considered NFIB Key Votes and asks lawmakers to support the consensus views of our members. We also remind them that the results will be reported back to the NFIB membership. 

The Big Sky Business Journal is a family-owned and operated business based in Billings, Montana. It was started by Dennis and Evelyn Pyburn in 1982, making it the first business publication in the state. It is the only independent business publication (not associated with daily newspapers) in the Montana.

The Big Sky Business Journal is published the 1st and 15th of each month. We feature a wide variety of informational articles, features about businesses and business people, reports about critical issues, data and statistics regarding our economy and trends.

Our tag line – “The Spirit of Commerce is the great bond of union among citizens” – reflects our philosophy about the role that business plays in any community. The benefits derived from, and the desire for commerce among citizens is the primary incentive for peace and civility among all people. The average man’s economic quest is to be free to exchange value for value. Therefore, more so than advocates of business, we are advocates of consumers, understanding that the business community, business owners, and entrepreneurship is served best only when the interests of consumers are held paramount. Such is the basis of free markets, and indeed, of liberty itself.

We greatly enjoy our job of reporting about the productivity, ingenuity, creativity, and wealth generating activities of our neighbors in Montana. These are the dynamic people who make a community tick, they are our readers, our advertisers, our friends, and we are so proud of all that they do.

We are open to submissions from one and all, but most especially are interested in news about businesses, not only in Billings and Yellowstone County, but throughout the state. Even though Montana is a big state, business people do business throughout the state and what’s happening at one location is just as important to business people on the other side of the state as it is to the establishment across the street.

The Big Sky Business Journal depends greatly upon subscriptions in its support, and we urge you to subscribe, to help make our continued publication possible, as well as enable improvements and expansion in what we do.

We also accept advertising. For more details please email us press@bigskybusiness.com or call (406) 259-2309. Our mailing address is:

Big Sky Business Journal P. O. Box 3262 Billings, MT 59103

Your subscription helps support the research and reporting that is necessary to bring current information to the business people of Montana, as well as the “free” posting of that information on line. It’s a bargain at just $32 annually, or $58 for two years which includes receiving the Big Sky Business Journal by mail twice monthly (24 issues a year), as well as receipt of the Monday Morning Hot Sheet via email  — an update of Billings area news and events, so be sure to include your email address. Also — your subscription includes an option of having the Billings Building Permits emailed to you as they become available each week. Again, just send us your email address with your subscription, with the request for the building permits. If you have any questions please call (406) 259-2309.

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