Government

Montana Ranks 5th in Taxes

23 January 2025
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The Tax Foundation recently released its 2025 State Competitiveness Index. This study revealed which states are taxpayer-friendly for both individuals and businesses. States are ranked based on income, sales, excise, property, capital gains, corporate, payroll, estate, and VAT consumption taxes. The Tax Foundation found that Wyoming is the most taxpayer-friendly state, Montana is 5th, Idaho is 11th, and Washington is 45th.

Wyoming was the top-ranking state for the fifth year in a row mostly because of its lack of corporate or individual income tax. Additionally, it has no inventory, franchise, occupation, or value-added taxes. It also enjoys tax exemptions for manufacturers and data centers. Wyoming has the luxury of having no corporate or personal income tax due to significant tax revenue from minerals. Although Wyoming’s exact tax model can’t be copied, its principles can be applied everywhere.

Idaho improved from its prior ranking of 16th to 11th. This can be attributed to its individual and corporate tax rates declining from 5.8% to 5.695%. Idaho has no statewide property tax (local tax only), no estate tax, and a 33-cent gas tax. Idaho currently collects $4,541 in state and local tax collections per capita. Idaho can improve its ranking by lowering individual income taxes even more.

Montana has an individual income tax ranging from 4.7% to 5.9%. Montana has a relatively low tax burden with a property tax rate of 0.69%, no estate tax, and a 33.75 cent gas tax. Montana collects $5,065 in state and local tax collections per capita. Montana has been trending in the right direction by passing multiple tax cuts in the 2023 legislative sessions. Included was lowering the income tax ceiling from 6.75% to 5.9%, increasing the small business exemptions from $100,000 in 2021 to now almost $1 million in 2024, and lowering the capital gains tax to make Montana the 4th lowest in the country. Gov. Gianforte recently announced that he plans to reduce the state income tax even more to 4.9%.

Montana Infrastructure Ranks Poorly

23 January 2025
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A report compiled by the Montana Section of the American Society of Civil Engineers gave Montana relatively poor grades in the state of its infrastructure. They ranked Montana in 14 categories ranging from bridges and roads to schools to airports to wastewater systems.

Montana received a C grade in 11 categories: aviation, bridges, dams, drinking water, energy, hazardous waste, public parks, rail roads, solid waste and waste water. C means mediocre and requires attention.

Montana received a D grade in two categories, schools and stormwater, which indicated they are poor and at risk. The final category, broadband, received an incomplete grade.

The state’s highest ranking, a C+, went to the rails category.

The state’s schools earned a D in the report due primarily to aging buildings and facilities.

“The challenges are further compounded by rising energy costs and declining student enrollment, placing additional strain on already tight school budgets. As a result, Montana’s schools are struggling to meet the demands of their aging infrastructure while providing a safe and healthy learning environment for students,” the report stated.

Methane Emissions Down 44%

23 January 2025
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Methane emissions from the largest oil- and natural gas-producing basins fell 44% between 2011 and 2013, according to newly published data from the Environmental Protection Agency.

According to the EPA’s Greenhouse Gas Reporting Program, methane emissions dropped in seven oil- and natural gas-producing basins by up to 87% from 2019-2023.

The drop occurred as U.S. domestic producers, led by Texas, broke records over the past few years, producing “more crude oil than any country, ever,” according to the US Energy Information Agency, The Center Square reported.

“Burning natural gas for energy results in fewer emissions of nearly all types of air pollutants and carbon dioxide (CO2) than burning coal or petroleum products to produce an equal amount of energy,” the EIA reports. “About 117 pounds of CO2 are produced per million British thermal units (MMBtu) equivalent of natural gas compared with more than 200 pounds of CO2 per MMBtu of coal and more than 160 pounds per MMBtu of distillate fuel oil.”

Facilities operating in two basins reported methane intensity emissions drops of more than 50% from 2019-2023: the Williston Basin (located in Montana, North and South Dakota), and the Appalachian Basin (spanning across Alabama, Georgia, Tennessee, Kentucky, Virginia, West Virginia, Ohio, Pennsylvania and New York).

This is after methane emissions dropped by more than 75% and production increased by more than 345% over a 10-year period, The Center Square reported.

Proposed Change in Social Security is Controversial

6 November 2024
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A bill is expected to arrive on the floor of the US House of Representatives this fall which would increase benefits for individuals with earnings that weren’t subject to Social Security taxation and end up costing taxpayers an additional $196 billion over ten years. The bill would repeal Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).

The proposal is controversial, as some Congressmen believe WEP and GPO would unfairly benefit public sector workers at a high cost to taxpayers. WEP adjusts Social Security benefits for workers who have pensions from working for state or local governments and who also qualify for Social Security but with a limited earnings record. The GPO makes similar adjustments for spouses and survivors who worked in jobs that were not subject to Social Security’s taxes.

Congress adopted these adjustments to preserve the intent behind Social Security’s progressive benefit formula, which replaces a higher percentage of preretirement wages for lower-income workers than for higher earners, and to duplicate the dual-entitlement rule that prevents workers from collecting more than one benefit at a time. Before the windfall elimination provision and government pension offset were implemented, certain workers and spouses would receive an unfair “windfall” in the form of higher benefits than Congress intended.

The current approach treats some beneficiaries better than others. When these rules were enacted in 1983, Social Security lacked the necessary data to make appropriate adjustments.

The Social Security Fairness Act of 2023 (H.R.82) would repeal both rules, giving public sector workers unfairly high benefits by treating them as if they had been low-income workers 

Mountain States Among Most 2nd Amendment Supportive

6 November 2024
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By Chris Woodward, The Center Square

Mountain States are among the most gun-friendly states in 2024.

Montana, Wyoming, Idaho, North and South Dakota all rank high in rankings from ammunition e-commerce and wholesaler company Ammo.com. 

Montana is fourth on this year’s ranking. Like other states in its region, Montana is a Constitutional Carry state with no registration or permit requirements. Meanwhile, Montana does not impose a sale tax on firearms, something Ammo.com said means firearms will “be a bit cheaper than in most other states.”

In a statement, Gov. Greg Gianforte said Montanans are proud of their Second Amendment rights. They also know they have a “responsibility” to preserve those Second Amendment rights. 

“We’ll continue to keep Montana a sanctuary for freedom and free enterprise, and we’ll always defend the rights of law-abiding Montanans,” said Gianforte.

In February 2023, the governor wrote United States Attorney General Merrick Garland to criticize the Biden-Harris administration’s efforts to erode the 2nd Amendment rights of Montanans. In January of that year, Gianforte took steps with the Board of Investments to block Environmental Social Governance (ESG) investigating of state funds. 

More than 150 firearms and ammunitions businesses are in Montana.

Wyoming is 12th this year, due in part to the Cowboy State having Constitutional Carry, a governor that is pro-2nd Amendment, and Stand Your Ground Castle Doctrine, and No Duty to Retreat policies. 

Idaho is the 11th most gun-friendly state. As it is in Wyoming, Idahoans can open and concealed carry without a permit.

“Those traveling to Idaho will need a concealed carry (CCW) permit, although the state accepts permits from all 50 states,” said Ammo.com in this year’s report. “The state’s standard sales tax applies to all firearms and equipment, but you won’t have to register your firearms or take additional courses before purchasing.”

North Dakota ranks 10th for reasons such as one needs to only reside in the state for 30 days to partake in open and concealed carry freedoms. Gun owners do have to be at least 18 years of age, have no felony convictions, and face no pending criminal charges. Still, Ammo.com applauds the state for allowing those with prior convictions to get their 2A rights restored in the state of North Dakota.

“Governor Doug Burgum recently declared North Dakota a Second Amendment Sanctuary State,” added Ammo.com.

South Dakota ranked ninth. Governed by 2nd Amendment supporter Kristi Noem, South Dakota currently has no registration requirements for firearms, nor does it have additional background checks. Want an enhanced carry permit for travel? Visit your local sheriff’s department for an application. 

“South Dakota accepts CCWs from all 50 states,” wrote Ammo.com. “You can also apply for a Gold Card to bypass the NICS (National Instant Criminal Background Check System).”

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Millennials, Better Financial Condition than Previous Generations

6 November 2024
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By Maggie Davis, Federal Reserve Bank of Minneapolis

From coming of age in the wake of the Great Recession to bearing much of the brunt of today’s soaring home prices, many people seem to think millennials have it pretty bad.

Contrary to that belief, the latest LendingTree study indicates millennials are in a better financial position than their Generation X and baby boomer counterparts at similar ages — particularly regarding net worth, assets, income and spending.

Here’s what we found.

Key findings

* When adjusted for inflation, millennials appear to be in a better financial condition than Gen Xers or baby boomers at similar points. In 2022, millennials (ages 26 to 41 at the time) had a median net worth of $84,941. In 2007, Gen Xers (ages 27 to 42 at the time) had a median net worth of $78,333 in 2022 dollars. In 1989, baby boomers (ages 25 to 43 at the time) had a median net worth of $58,101 in 2022 dollars. That means millennials’ net worth was 8.4% higher than Gen Xers’ and 46.2% higher than baby boomers’ at those ages.

* Millennials are more likely to have assets and carry debt than other generations at similar ages. 99.3% of millennials had assets in 2022, while 97.5% of Gen Xers and 93.8% of baby boomers had assets when they were around the same ages. Meanwhile, 88.1% of millennials carried debt in 2022, compared with 86.9% of Gen Xers and 85.8% of baby boomers around that age.

* Midpoint millennials have a higher median cumulative income than older generations. Millennials born in 1989 earned a median of $446,570 between 2014 and 2023 (ages 25 to 34). When the midpoint Gen Xers and baby boomers were 25 to 34, the median cumulative income was $417,700 and $362,330, respectively, in 2023 dollars.

* Still, millennials face significantly higher rent costs and homeownership hurdles. Adjusted for inflation, the median rent in 2024 for midpoint millennials age 35 is $1,481. That’s considerably more than the $1,251 for midpoint Gen Xers in 2008 and the $1,174 for midpoint baby boomers in 1990. Additionally, a 20% down payment on a median home purchase in 2024 is a breathtaking $85,960, compared with inflation-adjusted amounts of $69,305 in 2008 and $57,107 in 1990 — though comparatively low interest rates benefit millennials.

* Looking at overall expenses, millennials spent more money than boomers, but a smaller portion of their income. When midpoint millennials turned 33 in 2022, younger adults ages 25 to 34 spent an average of $67,883 across all items that year. When Gen Xers were of a similar age in 2006, they spent an average of $69,084 in 2022 dollars, and baby boomers spent an average of $63,761 in 1988. But factoring in average pretax income, those millennials spent 75.8% of their annual income — far less than the 83.2% spent by Gen Xers and 91.0% spent by baby boomers.

Matt Schulz — LendingTree chief credit analyst and author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life” — believes prior generations’ struggles have helped prepare millennials.

“I think that the scars from the Great Recession and the pandemic have helped shape millennials’ views on money, forcing them to be more focused on their finances than other generations have had to be,” Schulz says. “That focus has prompted them to learn more about money, get started with investing and savings earlier, become more entrepreneurial and make other financially focused moves that have helped set them up for success. It’s certainly helped that we’ve seen stocks hit record highs.”

Land Board Purchases Property

6 November 2024
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The Montana Land Board has conditionally purchased a 32,891-acre conservation easement to expand public access in northwest Montana. The easement is in the Salish and Cabinet mountains between Kalispell and Libby. This is the first phase of a potentially two-phased project totaling 85,792 acres of timberland and fish and wildlife habitat. The easement will protect wildlife habitat and key landscape connectivity, and provide permanent public recreation access. Forest management and sustainable timber harvest would continue. Additionally, the land will provide a migration corridor and year-round habitat for moose, elk, mule deer, and white-tailed deer. Hunters and anglers have used these lands for generations.

In August, the Land Board purchased more than 50,000 acres of habitat conservation leases (HCL) to increase public access, keep agricultural land in production, and conserve prairie habitat. HCLs are a voluntary, incentive-based agreement with private landowners that help ensure high-priority habitats are conserved while traditional agricultural activities, primarily livestock grazing, continue. Landowners commit to retaining wildlife habitats for 30 or 40-year terms.

Increasing public access to public lands is a top priority for the governor. Montanans have gained access to more than 100,000 acres of public lands through new WMAs in the Big Snowy Mountains, Bad Rock Canyon, and along the Yellowstone River with expanded access at Mount Haggin, and a new state park at Somers Beach.

Gianforte Gets an “A” on Cato Report Card

6 November 2024
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Only six governors in the country earned a grade of “A” from the Cato Institute, and Montana’s Governor Greg Gianforte is one of them.

Cato has released a report that grades governors on their fiscal policies from a limited government perspective. Governors receiving an A are those who have cut taxes and spending the most, whereas governors receiving an F have increased taxes and spending the most.

Cato explained the emphasis on governors stating, “Governors play a key role in state fiscal policy. They propose budgets, recommend tax changes, and sign or veto tax and spending bills. When the economy is growing, governors can use rising revenues to expand programs or they can return extra revenues to the public through tax cuts. When the economy slows and budgets go into deficit, governors can respond by raising taxes or trimming spending.”

The report said that Gianforte cut income tax rates and succeeded in a series of bills. In 2021, he cut the top individual income tax rate from 6.9 percent to 6.5 percent and collapsed seven income tax brackets to two. He expanded the standard deduction and repealed tax credits. Further reforms in 2023 cut the top individual income tax rate to 5.9 percent. He has also cut the capital gains tax rate and increased the exemption level for taxing business equipment.

Besides Gianforte governors receiving a grade of A are Kim Reynolds of Iowa, Jim Pillen of Nebraska, Jim Justice of West Virginia, Sarah Huckabee Sanders of Arkansas, and Kristi Noem of South Dakota.

Six governors receiving an F are Tony Evers of Wisconsin, John Carney of Delaware, Jay Inslee of Washington, Janet Mills of Maine, Kathy Hochul of New York, and Tim Walz of Minnesota.

All the governors receiving an A on this year’s report are Republicans, and all the governors receiving an F are Democrats.

The report is the 17th biennial fiscal report card, having been issued since 2022. It uses statistical data to grade the governors on their tax and spending records: Governors who restrained taxes and spending receive higher grades, while governors who substantially increased taxes and spending receive lower grades.

To spur growth, half the states have cut their individual or corporate income tax rates in recent years, and some states have converted their multirate individual income taxes into single-rate flat taxes. Unfortunately, many states have also been larding their tax codes with special interest breaks for filmmaking, green energy, and other politically favored industries.

Another trend affecting state budgets is the expansion of school choice programs. More than 30 states now provide support for private schooling through various tax and spending mechanisms. A dozen states have made eligibility for their school choice programs universal or near universal for all students.

Most states are enjoying surpluses today, but they differ in their budget preparations for tomorrow. Debt levels, rainy day funds, and unfunded retirement obligations vary widely by state.

When the economy is growing and revenues are rising, Democrats tend to increase spending, whereas Republicans tend to both increase spending and cut taxes. Recently, state budget surpluses have been so large that both Republicans and Democrats have cut taxes, although the Democratic cuts have often been one-time rebates, which are scored lower on this report than the permanent cuts favored by Republicans.

Tax and spending data for the report come from the National Association of State Budget Officers (NASBO), the National Conference of State Legislatures, the Tax Foundation, the budget agencies of each state, and news articles. The data cover the period from January 2022 to August 2024.1 The report rates 48 governors. It excludes the governor of Louisiana because he has been in office only a brief time, and the governor of Alaska because of peculiarities in that state’s budget.

Feds Subsidize Battery Processing Manufacturing and Recycling

6 November 2024
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Last week the Biden –Harris administration announced over $3 billion in federal grants to subsidize  domestic battery processing, manufacturing, and recycling projects.

“These investments are also going to help end America’s reliance on critical materials from our economic competitors like China,”  said Energy Secretary Jennifer Granholm.

Lael Brainard, director of the National Economic Council under the White House, said the investments would address the vulnerability of depending on China for critical minerals and battery supply chains.

China is a dominant player in the global lithium-ion market.

The country’s output was over 940 gigawatt-hours last year, at the same level of estimated global demand. Seventy percent, or $13.1 billion, of the U.S. lithium-ion battery imports in 2023 were directly from China. The percentage increased to over 80 for the first half of this year owing to the market’s anticipation of higher tariffs.

Last week, the Office of the United States Trade Representative finalized its tariffs on Chinese goods. Tariffs on Chinese lithium-ion electric vehicle batteries will increase from 7.5 to 25 percent on Sept. 27, and the lithium-ion non-electrical vehicle battery tariff rate hike to 25 percent will occur at the beginning of 2026.

Farmers, Businesses Face Criminal Charges if Failing to Register

6 November 2024
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Even though they have not perpetrated any crime, thousands of farmers may face criminal charges if they fail to file information with the federal government. They may face steep fines and possible jail time for failing to file their businesses with the federal government.

Jan. 1, 2025, is the deadline to file Beneficial Ownership Information (BOI) with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

New analysis in a Market Intel by American Farm Bureau Federation economists shows more than 230,000 farms are being mandated to file, but government data indicates less than 11% of all eligible businesses nationwide have done so.

Actually, all businesses are supposed to comply with The Corporate Transparency Act of 2021. The Treasury Department says that they must register any “beneficial owner” of a company to better enable the agency to investigate money laundering.

Many farms are structured as either a c-corporation, s-corporation or limited liability company (LLC), which are now required to be registered if they employ fewer than 20 employees or receive under $5 million in cash receipts – which covers the vast majority of farms.

 “The use of LLCs is an important tool for many farms to keep personal and business assets separated, but small businesses often lack the staff to track and stay in compliance with changing rules and regulations,” said AFBF President Zippy Duvall. “It’s clear that many farmers aren’t aware of the new filing requirement. Unclear guidance and lack of public outreach are now putting thousands of America’s farmers at risk of violating federal law.”

 Businesses that fail to file, or do not update records when needed, could face criminal fines up to $10,000 and additional civil penalties of up to $591 per day. Failure to file could also lead to felony charges and up to two years in prison.

“The greater farm economy will also be impacted by CTA requirements,” AFBF economists write. “Many feed and supply stores, crop marketers like grain elevators and the greater rural business community are also likely required to file their BOI and subject to penalties if they do not comply. The regulatory burdens and potential enforcement crackdowns could have ripple effects throughout the entire food, fiber and fuel supply chains.”

According to Gina Stevens, Montana Farm Bureau Federation Taxation Committee Chair, if your entity is set up with a lawyer, contact that lawyer to see if the BOI has already been filed. If you must file a BOI, it needs to be completed either by yourself or by an tax attorney. Your accountant cannot do this for you.

Stevens, a Hardin accountant, added that if you formed a reporting entity in 2024 you only have 60 days to file this form.

“We’ve been telling people that if they file with the Montana Secretary of State, chances are they need to file a BOI. If you are unsure whether you are required to file your business’s BOI with FinCEN, contact your accountant or tax attorney immediately,” noted Stevens. “It is wiser to inquire and find out you don’t need to file a BOI than face high fines and even jail time if you needed to file but didn’t.”