Government

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
Dennis Pyburn
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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.

Program to Help Businesses Grow

25 February 2022
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Governor Greg Gianforte has announced Montana entrepreneurs have a new tool to grow their businesses. Approved by the governor in December, the Montana Down Payment Assistance Program is a public-private partnership between the State of Montana and Montana’s banks, credit unions, and economic development agencies. 

 “Montana entrepreneurs and job creators now have another tool in their toolbox to invest and grow their business, create more good-paying jobs, and meet increasing consumer demands,” Gov. Gianforte said. “I appreciate the private sector leaders who are partnering with the state in this first of its kind program.” 

 The Montana Down Payment Assistance Program will help finance the acquisition of equipment, purchase of real estate or buildings with improvements, and new construction for existing Montana businesses. Loans have a low fixed interest rate for ten years and range in size from $250,000 to $3,000,000. 

 The Governor’s Office of Budget and Program Planning and the Montana Board of Investments developed the program and presented the proposal to the ARPA Economic Transformation and Stabilization and Workforce Development Advisory Commission in December. With the commission’s unanimous, bipartisan recommendation, Gov. Gianforte allocated $37 million for the program to the Montana Board of Investments. 

Program details are available at https:// investmentmt.com/ Loan-Programs/ Programs-

Hert Joins Economic Development Group

23 February 2022
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Southeastern Montana Development Corporation (SEMDC) recently hired additional staffing to assist the regional non-profit economic and community development, group. Amber Hert has joined SEMDC as the new Administrative Services Director and will be based in the Colstrip SEMDC Office. Her primary focus will be managing the day-to-day operations within the Colstrip office and directing the multiple SEMDC Revolving Loan Fund (RLF) Programs.

Jim Atchison, SEMDC Executive Director, noted that “We have been looking for the right person to lead our loan programs for the past 1.5 years.“  “We are very pleased to find Amber, who, with her experience, skills, and credibility, will certainly be an asset to SEMDC and our clients.”

Hert, a Colstrip native, brings over 10 years of financial services experience to the job and most recently managed a regional credit union. Hert will work closely with the SEMDC staff, the regional banking community, and small businesses within the nine-county RLF region. Besides working with loan clients to ensure stability, she will also market and grow the SEMDC RLF programs with the regional banking partners to strengthen collaborative efforts.

 “Even with COVID and labor shortages, we have seen a tremendous amount of interest and growth in the regional small business community in the past few years. We know that Hert will take our loan programs to the next level,” added Atchison.

SEMDC is a regional non-profit economic development group established in 1997 to stimulate and encourage economic activity in the four (4) Counties of Custer, Powder River, Rosebud, and Treasure.

Governor Tours Craft Malt

23 February 2022
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Governor Greg Gianforte and Christy Clark, director of the Montana Department of Agriculture, toured Montana Craft Malt to highlight how the operation promotes Montana’s high-quality ag products and expands value-added ag opportunities for Montana producers.  

 “As we work to strengthen our state’s number one industry, it’s critical we continue finding ways to help add value to our commodities, capture that premium, and return it to the rightful recipient – Montana producers,” Gov. Gianforte said. “Using locally-sourced ingredients, Montana Craft Malt helps add value to our commodities right here in Montana, while supporting Montana families with good-paying jobs.”

Montana Craft Malt produces 10,000 tonnes of malt annually and adds value to ag supply chains.

 Utilizing a state-of-the-art facility spanning more than 50,000 square feet on nine acres, Montana Craft Malt is strategically positioned at the intersection of two interstate highways and a railway spur to ensure the strength of their supply chain from Montana producers to consumers.

 “Montana Craft Malt is a shining example of value-added agriculture at work,” said Director Christy Clark. “By processing some of the finest Montana-grown barley into artisan malts that are then used in craft beers and spirits, Montana Craft Malt is bringing grain to glass full circle. I look forward to their continued success.”

 The Montana Department of Agriculture is focused on expanding value-added agriculture opportunities in the state. While Montana crops and livestock are already recognized for their superior quality throughout the world, and agriculture remains the backbone of Montana’s economy, the department is working to find innovative ways to add value to these raw commodities, to ensure that Montana can keep pace with a transforming agricultural industry and grow prosperity.    

Promoting value-added agriculture to strengthen the ag industry is a signature element of the governor’s Montana Comeback Plan.