Government

Some States Suspend Gas Taxes

5 April 2022
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Some states are suspending their gas taxes in order to make gasoline cheaper for their citizens. Georgia and Maryland are such examples, where taxes add 30 cents and more to the cost of a gallon of gasoline. California adds 67 cents. In Montana, as of Jan. 1, 2022, tax on a gallon of gas was 33.3 cents, ranking Montana 21st for the highest gas tax.

Gas prices are hovering near all-time highs in the United States. The average price of a gallon of regular gasoline stood at $4.24 as of March 23 – up 70 cents from a month ago.

What Americans pay at the pump is subject to a number of factors – the most important of which is the price of crude oil, which is determined by global supply and demand. As major markets around the world have banned Russian oil imports amid the ongoing war in Ukraine, the global energy market has tightened considerably, sending gas prices to record highs.

While shocks to the global energy market are largely out of the control of U.S. policymakers, other factors affecting gas prices are not, namely taxes. The federal government levies a tax of 18.4 cents on every gallon of gas sold to American motorists.

On top of the federal gas tax, as of January 2022, Montana levied an additional tax of 33.3 cents per gallon – the 21st highest gas tax among states. Currently, the average price of a gallon of gas in Montana stands at $4.02. Including the federal tax, taxes account for 12.8% of the average price of a gallon of gas in the state.

Gas taxes are typically used to fund road and highway repair projects to fix damage caused by usage and wear. In Montana, vehicle miles traveled per year total about 14,670 per driver, the 14th most among states.

Not only are taxes adding to the pain Americans are feeling at the pump, but the revenue they generate has failed to keep up with infrastructure maintenance costs and inflation. While many states are adjusting tax rates to address the shortfall, the federal gas tax has not changed since 1993.

Montana Gets $43 million to Subsidize EV Charging Stations

5 April 2022
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Montana will be receiving $43 million of federal funds to subsidize the building of charging stations for electric vehicles along US Highways over five years. The funds are part of $7.5 billion that was included in the Infrastructure Investment and Jobs Act. Of that total, $5 billion will go to states under the National Electric Vehicle Infrastructure Formula Program.

The funding will be administered by the Montana Department of Transportation in collaboration with the Energy Office at the Department of Environmental Quality. A plan must be submitted by Aug. 1 on how the money will be used to subsidize private investment. “The Montana Energy Office at DEQ has developed expertise in electric vehicle charging infrastructure through the 2017 settlement with Volkswagen,” said DEQ Director Chris Dorrington. “Efficient distribution of these new federal funds will support on-going private investment in this growing area of need for electric vehicle charging infrastructure in Montana.”

The federal funding can cover up to 80 percent of the costs associated with the electric vehicle charging infrastructure and the remainder will come from private investment—meaning state funds will not need to be used to match. DEQ’s Fast Charge Your Ride Program awarded funding in 2021 using the same cost share model to partner with private entities.

 “The Montana Energy Office at DEQ has developed expertise in electric vehicle charging infrastructure through the 2017 settlement with Volkswagen,” said DEQ Director Chris Dorrington. “Efficient distribution of these new federal funds will support on-going private investment in this growing area of need for electric vehicle charging infrastructure in Montana.”

 “This is a great opportunity for Montana to combine federal funding with private investment to create 21st century transportation infrastructure,” said MDT Director Mack Long. “Government works best when it works together with the private sector. This program will be a great opportunity to display effective public-private partnerships that serve the traveling public in Montana.”

The funding will initially be limited to highway corridors that have been designated as Alternative Fuel Corridors by the Federal Highway Administration. In Montana that includes Interstate 15, Interstate 90 and Interstate 94, along with U.S. Highway 2 and Highway 93.

Montana must develop and submit an “Electric Vehicle Infrastructure Deployment Plan” by Aug. 1. DEQ will lead the development of the plan in coordination with MDT. A virtual information session is planned for April 4 from 1–2 p.m.

Montana ‘highly dependent’ on Income & Property Taxes

5 April 2022
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By Bob Pepalis,The Center Square

Montana’s favorable ranking for low taxes doesn’t mean that property owners aren’t concerned with taxes, according to the head of the Montana Taxpayers Association.

WalletHub recently ranked Montana third after Alaska and Delaware in its report on “States with the Highest and Lowest Tax Rates.” The state has a 7.11% median tax rate, which includes state and local taxes, according to the personal finance website.

“We’re highly dependent on income and property taxes. The property taxes are a concern to a lot of people,” Bob Story, executive director of the Montana Taxpayers Association, told The Center Square.

The nonpartisan group researches tax and government spending, and works with the public and private sectors to develop fair, equitable and predictable tax policies, according to its website.

The state has a corporate income tax. Businesses to some extent that are invested heavily in property and equipment as opposed to those mainly invested in personnel would be affected by the tax rates WalletHub measured, Story said.

“I don’t know how many businesses are really greatly concerned about income taxes in the state, as long as they’re not extremely out of the line,” Story said.

Businesses generally move more for aesthetic reasons unless they are involved in something like mining or heavy manufacturing that requires them to be in a specific location, he said.

People moving to Montana are driving home prices, Story added.

People moving to Montana have a significantly higher income than the average in Montana, according to a recent report by the Montana Legislative Fiscal Division.

“They’re buying houses as a sight-unseen case deal, and they’re just getting out of, getting away from wherever they were, and getting into a more rural area,” Story said.

The report said the growth of Montana’s population accelerated in calendar year (CY) 2020 and especially 2021.

“With these new individuals comes an increasing tax base, and if trends continue with those seen in CY 2019 and CY 2020, these new taxpayers will bring incomes typically larger than existing Montana residents, especially for those aged over 65,” according to the report.

A lot of people who moved to Montana keep their job because they can work over the internet and don’t have to be at their original location, Story said, noting that’s a big change in the economy that has an effect on the tax systems. 

Governor Says, ‘Come On Over to Montana’

5 April 2022
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Governor Greg Gianforte has invited Minnesota small business owners to bring their businesses and good-paying jobs to Montana as they face massive tax hikes in Minnesota.

“As a business leader and entrepreneur, I understand it’s critical for the success of your business to have tax and regulatory stability and certainty, which allows you to thrive, create jobs, and increase opportunities. Anything less than certainty and stability is bad for business, the governor wrote in an open letter to Minnesota small business owners.

“I write to offer you greater tax and regulatory certainty as well as a business-friendly climate in Montana,” the governor continued.

State leaders in Minnesota failed to replenish the state’s unemployment insurance trust fund after borrowing funds from the federal government during the pandemic. The fund, which is $1.3 billion in debt, will now be filled with revenue from a 30% tax hike on first quarter payroll tax bills for Minnesota businesses.

Writing to fellow entrepreneurs and business owners in Minnesota, Gov. Gianforte outlined what makes Montana the best place to do business, including a stable, predictable climate for business, a recently overhauled pro-business, pro-jobs tax code, and a 2021 tax cut that provides $120 million in permanent tax relief for Montanans.

“These are just a few reasons why Montana was recently ranked the best state to start a small business,” the governor wrote.

The governor also emphasized Montana’s excellent quality of life, rich outdoor heritage, and Montanan’s work ethic which set the Treasure State apart.

Reflecting on his success building a business in Montana and creating 500 high-wage Montana jobs, the governor wrote, “We only succeeded because of Montanans’ strong work ethic. I’m confident you can find success here too.”

Gov. Gianforte concluded, “If you value freedom and free enterprise and are looking for a location to do business that has a stable, predictable, business-friendly climate, look no further than Montana.”

No Big Hit when the Federal Aid Runs Out

8 March 2022
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By Bob Pepalis, The Center Square

Montana taxpayers shouldn’t worry about the state’s budget once the influx of federal money runs out because of the approach state lawmakers took last session, according to a taxpayer advocacy group.

Revenue estimates by Montana’s Legislative Fiscal Division range from $181 million above forecasts to $956 million higher than set in the Legislature’s joint balance budget resolution passed in January 2021.

“How long does that surplus go on? Because most analysts here think it’s mainly driven by the federal stimulus money,” Bob Story, executive director of the Montana Taxpayers Association, told The Center Square.

Income and corporate taxes have also been a big a part of the state’s budget.

Individual income tax collections through the end of December were $114.2 million, which was 12.7% above the year-to-date collections in fiscal year 2021, the Legislative Fiscal Division report said.

Even without a surplus, Montana Gov. Greg Gianforte is expected to work on lowering income tax rates, something he accomplished in the last legislative session. In next year’s session, Story said he expects more legislation to further reduce rates, which would happen even without the big budget surplus.

“That was kind of one of his goals all along was to try to bring down, get back in line again with some of the surrounding states’ income tax rates,” he said.

Corporate income tax collections through the end of December were 29%, or $33.9 million above this time in fiscal year 2021, which was far above estimates.

Coal, oil and gas tax revenues have been down a bit, but might be coming back up, Story said.

But federal stimulus funding during the pandemic has supported the state budget. The American Rescue Plan Act provided $2.7 billion to the state in 2021. The Coronavirus Aid, Relief and Economic Security (CARES) Act sent $1.25 billion to Montana and “CARES Act II” provided another $754 million in 2020.

“They did the best they were allowed to do to use it in existing programs where they could or use it … in one-time-only expenditure. So, and I don’t think there’ll be a big, big hit when the federal money finally runs out,” he said.

Montana received $14 billion total in federal funding in the past 18 months, according to Story. A lot of that has been driving the economy, along with a pickup in the tourism industry.

Whether the huge growth in revenue is something that will stay with us or it’s a bubble in the system, he said legislators are reluctant to use it to backfill local government revenue losses from property tax reductions.

All the federal money hasn’t been allocated or spent in Montana, Story said. A lot of it goes into infrastructure projects that will take several years to build, keeping the money churning in the system.

“Everyone’s in the same boat,” Story said. “There’s X amount of construction workers and equipment and supplies out there and every state is scrambling for them.”

A lot of the infrastructure projects funded with stimulus money will have trouble meeting the 2026 deadline. Congress may have to extend the deadline just to get projects that have been on the drawing board completed, he said.

Montana Ranks 5th for Taxes

8 March 2022
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Montana is improving in the tax rankings when compared to other states.

The Tax Foundation announced its 2022 tax study this week and Montana was in the top ten. Overall Montana ranks fifth, with Wyoming in first place, South Dakota in second, Alaska third, and Florida fourth.

The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. The Index is designed to show how well states structure their tax systems and provides a road map for improvement.

In the specific components Montana ranked 22nd in Corporate Tax Rank; 24th in Individual Income Tax Income; 3rd in Sales Tax Rank and 29th in unemployment tax.

Montana has an income tax rate of 6.75 percent while five states have no income taxes and three have only selective income taxes. Collection per capita of state and local individual income in Montana is $1119 which ranks it 24th. The state and local tax burden is 8.7 percent and ranks 38th.

Montana’s top corporate income tax rate is 6.75 percent. While the state has no sales tax there are specific sales taxes. Montana’s gas tax 32.75 cents ranking it 22nd. Cigarette tax rate is $1.70, ranking 23rd.

Montana’s property taxes is .76 percent ranking it 32nd. Per capita the state collects $1567 ranking it 22nd.

The absence of a major tax is a common factor among many of the top 10 states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Nevada, South Dakota, and Wyoming have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida and Tennessee have no individual income tax; and New Hampshire and Montana have no sales tax.

Rounding out the top ten states is New Hampshire Nevada, Tennessee, Indiana and Utah.

Among the ten lowest ranked states New Jersey is the worst and then New York followed by California, Connecticut, Maryland, Minnesota, Arkansas, Vermont, Louisiana, and then Hawaii at 41st.

Neighboring states, Idaho ranked 17 and North Dakota, 19.

The states in the bottom 10 tend to have a number of afflictions in common: complex, nonneutral taxes with comparatively high rates. New Jersey, for example, is hampered by some of the highest property tax burdens in the country, has the highest corporate income taxes and among the highest individual income taxes in the country, has a particularly aggressive treatment of international income, levies an inheritance tax, and maintains some of the nation’s worst-structured individual income taxes.

Americans were on the move in 2021, and they chose low-tax states over high-tax ones, according to the Tax Foundation. Montana was among the top in-migration states with an increase of 1.8 percent. Idaho increased 3.4 percent, while New York lost by -1.8 percent and California lost .8 percent.

State Remains Focused on Workforce Training

8 March 2022
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Together with the Department of Commerce, Governor Greg Gianforte announced the state has awarded $605,000 to Montana businesses and nonprofits for skills-based workforce training and apprenticeship programs. 

“When you couple the Montana work ethic with the tools folks need to thrive in the jobs of today and the future, the result is a highly qualified, highly skilled workforce that can only be found here in Montana,” Gov. Gianforte said. “With this investment, we’re ensuring more hardworking Montanans have the skills needed to thrive and succeed in good-paying Montana jobs.” 

In October, Gov. Gianforte announced the launch of the Workforce Training Grant Program (WTG) reimbursing businesses for costs associated with skill-based training for new and existing full-time workers. 

 Since the program’s launch, eligible businesses have been able to apply to the program and receive up to $3,000 per eligible employee, with a maximum allocation of $210,000. Each eligible employee must make a wage that meets or exceeds 170 percent of Montana’s current minimum wage, which today is $15.64 per hour. 

 “The growth of any business can only happen through trained and capable employees,” Montana Department of Commerce Director Scott Osterman said. “Workforce training grants are adaptable to evolving industry and market needs. The Montana Department of Commerce is excited to help businesses connect with grant dollars that will provide a real return on investment in terms of future growth and productivity.” 

 The first round of award recipients of the ARPA Workforce Training Grant Program are as follows: 

 Bozeman’s Acela, Inc. will receive $72,000 to train five new full-time and 19 existing full-time WTG-eligible jobs within one year. 

 Missoula’s Big Sky Life Support will receive $87,000 to train 25 new full-time and four existing full-time WTG-eligible jobs within one year. 

 Kalispell’s Code Girls United will receive $12,000 to train two new full-time and two existing full-time WTG-eligible jobs within one year. 

Bozeman’s Harvest Solar MT, LLC will receive $11,000 to train seven existing full-time WTG-eligible jobs within one year. 

Butte’s Montana Craft Malt Company will receive $36,000 to train 12 existing full-time WTG-eligible jobs within one year. 

Kalispell’s Tricon Commercial Construction, LLC will receive $117,000 to train 17 new full-time and 22 existing full-time WTG-eligible jobs within one year. 

Bozeman’s Williams Plumbing & Heating, Inc. will receive $210,000 to train 30 new full-time and 40 existing full-time WTG-eligible jobs within one year. 

The governor also announced the following ARPA Apprenticeship Training Grant Program recipient: 

 Helena’s Laborers AGC Apprenticeship, Training, and Work Preparedness Trust for Montana will receive $60,000 to provide construction-related apprenticeship training for 20 new positions and add more training staff.  

 The governor accepted the funding recommendations from the ARPA Economic Transformation and Stabilization and Workforce Development Programs Advisory Commission. ARPA advisory commissions comprise state legislators, agency leaders, and administration officials. More information about the advisory commissions may be found at arpa.mt.gov. 

 The Workforce Training Grant Program and Apprenticeship Training Grant Program build upon Gov. Gianforte’s success in expanding workforce development, a central element of his Montana Comeback Plan. 

In April 2021, Gov. Gianforte signed into law the Montana Trades Education Credit, or M-TEC. M-TEC provides $1 million per year in 50-percent credits to businesses for their employees to learn a trade. M-TEC will support as many as 1,000 scholarships annually. Under the program, employers and employees can decide on training that is best for the business and the employee. Representative Llew Jones (R-Conrad) sponsored House Bill 252, which creates M-TEC. 

 Last week, the governor announced a $6 milliongrant to Accelerate Montana, a collaborative partnership led by the University of Montana to establish a series of rapid retraining and upskilling programs. The programs will train up to 5,000 Montanans in sectors such as construction, health care, manufacturing, and infrastructure.

Tax Abatement Programs Encourage Business Capital Investments

8 March 2022
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Yellowstone County and Billings’ tax abatement programs encouraged $410.8 million of investment in the community in 2020, involving eleven different businesses, supporting $126.7 million in payrolls and granting $3.3 million in tax savings, reports Steve Simonson, Senior Project Manager for Big Sky Economic Development.

Those totals include abatements granted to Phillips 66 and CHS. Simonson pointed out that the refineries account for two-thirds of all manufacturing that happens in Yellowstone County. Deducting refinery abatements, the total capital invested by other businesses came to $34.3 million who have total payrolls of $26.6 million. Their total tax savings was $154,679.

Simonson highlighted one company’s abatement program that concluded in 2019. Motor Power Equipment invested $2,530,000 in their business increasing its market value from $1,900,000 to $5,400,400, creating an increase of $3,500,400 of new wealth in Yellowstone County. The company’s beginning general tax bill was $42,555 and ended $75,319, an increase in taxes for the county of $32,764.

Other companies with on-going tax abatement programs in the county, extending as far back as 2011, also include Aspen Air, Billings Flying Service, Home 2 Suites by Hilton, Subaru of Billings, Montana Peterbilt, Northwest Scientific and Summit Resource International. In total the companies made capital investments totaling $445 million from 2011 through 2018 and generated 95 jobs from 2019-20.

There are two versions of the abatement program which the Montana Legislature has allowed to cities and counties, both of which strongly focus on job creation.

A five year program reduces tax on remodeling, reconstruction, and/ or expansion of existing real property when the cost of improvements exceeds $500,000.Tax relief comes with only an incremental increase in taxable value on the new value generated by the improvements or additions. The Remodeling, Reconstruction or Expansion Tax Incentive Program allows a reduction of taxes by 100 percent for the first five years after completion of the project. After the fifth year, the property is returned to its full taxable value.

The ten year program, called the New & Expanding Industry Tax Incentive Program, allows tax reductions on the taxable value of the real property up to 50 percent in the first five years, but only for businesses that generate at least 50 percent of their revenues from out of state. The abatement decreases ten percent a year from year six to ten, to the full 100 percent of tax liability in year ten.

In 2017 the state legislature allowed governing bodies the discretion to choose an abatement of either 50 percent or 75 percent in years one to five, and then decrease it 15 percent a year in years six to ten.

MMEC to Hold Course for Excellence

26 February 2022
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Are you ready to accelerate your company’s journey towards Operational Excellence? Do you have high potential employees motivated to learn and prepare for Lean certification?

The Montana Manufacturing Extension Center has just added a new session of its Operational Excellence course, which has been updated to reflect the latest core material and test requirements for the Society of Manufacturing Engineers (SME) Bronze Certificate.  The 6-week, in-person course will be offered at MMEC’s main offices in Bozeman, from March 28 to May 10.  It will combine interactive activities, real-world problem solving, and classroom instruction, offering participants solid preparation for certification testing as well as proven strategies that can be immediately applied at work. Participants will:

* Learn essential elements of Lean, Theory of Constraints, and Six Sigma

* Gain professional mentoring and earn professional credentials

* Become engaged leaders in improving company performance

As a manufacturer, your company can benefit from the return on investment from the projects implemented by employees trained in OpEx tools, and expand your efforts toward company-wide, transformational change. For details contact MMEC Business Advisor and OpEx Instructor Alistair Stewart at Alistair. stewart@ montana.edu

Tackling Labor Shortage at The High School Level

25 February 2022
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Big Sky Economic Development’s (BSED) workforce development program, BillingsWorks will be implementing the Summer Jobs Program in Yellowstone County this upcoming summer. The Yellowstone County Summer Jobs Program matches participants with a job or paid internship, provides a paid foundational work skills training, and connects students with an adult mentor for the summer. SJP participants are high school students and recent graduates eager to develop their work skills and explore their career options. Participating area businesses (in all industries) and community organizations help strengthen the local economy by connecting youth to meaningful work experiences.

“We are excited to support our partners in Yellowstone County as they implement the Summer Jobs Program. We have seen success with this community-driven program in Helena, and we are eager to expand the program so more youth can access earn-and-learn opportunities,” Gabrielle Ekund Rowley, Executive Director of American Jobs for America’s Youth Montana.

Through the program, students gain skills, experience, and professional networks that prepare them for success in future endeavors. The work skills our students learn and practice serve them well both in and out of the workforce.

Bo Bruinsma, Career Outreach Director at School District Two stated, “Billings Public Schools is excited our students will have the opportunity to participate in the Yellowstone County Summer Jobs Program. Students will have the opportunity to be introduced to careers and industries they are interested in, gain valuable employability skills and experience, and network with professionals in our community. We’re confident this program can help students make more informed decisions about their future and show them all the great career opportunities available here in Yellowstone County.”

“BillingsWorks is proud to have the opportunity to collaborate with community partners to implement the SJP here in Yellowstone County in efforts to address local workforce challenges and expose students to potential career pathways.”- Marcell Bruski, Director of Marketing & BillingsWorks

The execution of this effort will be done in conjunction with the Yellowstone County Summer Jobs Program (SJP) Committee made up of BSED, the Billings Chamber of Commerce, School District 2, Reach Higher Montana, City College at MSUB, Billings Association of Realtors and with the support of American Jobs for American Youth (AJAY) Montana. The goal of this pilot year is to serve at least 30 Yellowstone County youth (ages 16-19), matching them with local employers and local mentors.