Government

FWP to Acquire Cottonwood Island

6 May 2021
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Montana Fish, Wildlife and Parks (FWP) is in the process of purchasing two islands in the Yellowstone River east of Reed Point for a fishing access site and to fulfill a need for woody debris and wildlife habitat. The acquisition will replace habitat that was removed during the cleanup on July 1, 2011 of the ExxonMobil Pipeline Company oil spill at Laurel. 

The purchase must be approved by the commission in April and the entire transaction will be completed by mid-summer, according to Robert Gibson, FWP Program Manager.

The 45 acres of islands are currently owned by the Montana Department of Transportation, which acquired them when it bought a ranch as part of a plan to abandon an old bridge across the Yellowstone River. FWP has agreed to buy the islands with $54,050 from the Department of Justice Natural Resource Damage Program (NRDP). 

NRDP was funded through a settlement with Exxon Mobil Pipeline Company following the rupture the Exxon Mobil Pipeline petroleum pipeline in 2011. During cleanup of the spill, crews altered riverside wildlife habitat and removed large woody debris – primarily downed cottonwood trees. Such debris is responsible for creating and maintaining islands and other natural structures that form a healthy, meandering river. 

The islands being acquired will remain undeveloped to leave habitat intact..

Income Tax Deadline Extended for Montana

5 May 2021
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Governor Greg Gianforte extended the payment and filing deadlines for Montana individual income taxpayers’ 2020 tax returns to May 17, 2021. 

“Last year brought real, serious challenges to Montanans, and it’s only appropriate to extend the deadline so Montana taxpayers have some extra time to file, without having to worry about interest or penalties,” Governor Gianforte said. 

The May 17 deadline is in keeping with the new federal filing deadline.

The Department of Revenue advises that the American Rescue Plan Act excludes the first $10,200 of unemployment benefits from federal taxes for those making less than $150,000. Those who have already filed their federal and Montana tax returns do not have to amend their returns. But those who received unemployment benefits in 2020 and have not yet filed should follow the revised instructions for their Montana return at MTRevenue.gov. 

City Moves Forward on Massage Therapist Ordinance

4 May 2021
Evelyn Pyburn
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By Evelyn Pyburn

The Billings City Council has adopted new regulations for the massage therapy business in Billings. The additional laws that will control how business owners provide their services are aimed at tripping up sex and human trafficking criminals who operate under the guise of being massage therapy businesses.

Hearings were held on April 12 and April 26.  After months of discussion, debate and revisions the proposed ordinance still encountered proposed amendments during hearings, to make it more palatable to therapists who strongly, and often passionately, opposed the regulations, saying that their legitimate businesses are being misused as a shortcut to address a law enforcement failure to enforce existing laws.

Advocates and law enforcement, however, say they need more tools to deal with a human trafficking problem that has grown so extreme that it draws worldwide attention to Billings. The human trafficking involves luring women from, usually Asian countries, to Billings where they are then enslaved for commercial sex activity. The human trafficking element also poses risks for the abduction of young people locally.

Mayor Bill Cole supported the ordinance saying that as revised, the regulation is considerably less intrusive than what it was in its initial version. City Councilwoman Penny Ronning is credited with have spearheaded the campaign to implement the ordinance, and several proponents applauded her perseverance and efforts.

Only three city council people opposed the adoption of the regulation – Pam Purinton, Danny Choriki and Frank Ewalt – mostly on the grounds that it overly burdens the legitimate operation of small business owners.

City Council Member Danny Choriki said, “It still bothers me that we are using business licenses… it is a bad precedence. …it is still a bad solution… it is too much of a shortcut for law enforcement.” 

The council rejected an amendment, proposed by Purinton, that would have sunsetted the ordinance in two years, at which time the council could evaluate whether it was succeeding in its purpose, revise it, renew it or suspend it. Mayor Cole opposed the amendment saying he felt that to believe the law could be terminated in two years would give criminals the idea that if they could just wait it out, the restrictions and additional licensing requirements would go away.

Considering that the problem of prostitution and sex trafficking has been an on-going issue in Billings for decades, to sunset the law in just two years is “a bad idea,” said Councilwoman Kendra Shaw. Two years is not enough time to determine the effectiveness of the ordinance, she said.

That sex and human trafficking has been a long-term problem in Billings was underscored by several of those testifying regarding the ordinance – on both sides of the issue.

“In 1979 Tokyo Sauna opened and everyone knew what it was and it was just shut down in 2019,” pointed out one massage therapist during public comment. She continued, “Prostitution is against the law and there were sting operations… and they never shut them down and shame on our city…”

Now they come “into our legitimate operations and shut us down…. I feel like I am being attacked and put into a position of making me a prostitute at my business, and I have been doing this for 24 years.”

City Administrator Chris Kukulski said that Billings is patterning their ordinance and strategy after that of Aurora, Colorado, a city that claims they were able to eliminate their commercial sex after enacting the ordinance.

His claim was rebutted by one of massage therapists, who said that all that happened in Aurora was that the establishments moved a few miles down the road outside the city limits – a concern that was mentioned several times in the testimony about the potential outcome locally.

Repeatedly citizens declared that the real solution has to come from law enforcement and if that requires the citizens paying higher taxes to get the needed personnel then that is what has to be done.

The current ordinance will be complaint-driven and overseen by code enforcement staff in Billings in cooperation with the law enforcement.

Councilman Frank Ewalt challenged the effectiveness of heightening restrictions on massage therapy businesses.

He read from an earlier statement from Police Chief Rich St. Johns about policing of commercial sex enterprises and human trafficking: “Candidly speaking it is low priority…we know they are out there, but they are difficult to police. Investigations are challenging. Victims fail to cooperate because they do not trust law enforcement. Currently a successful prosecution is beyond our resources, specialization and scope. You are investigating criminals who are business savvy, well-organized, adept at hiding resources, and changing tactics.”

“What will this ordinance change about that?” questioned Ewalt, “Will police all of a sudden have a high priority? Are these businesses not going to be as savvy? Are these businesses going to be less adept at hiding their resources?” Ewalt noted that they have had only one complaint filed.

Complaints are low, conceded St. Johns. It is difficult to get victims to come forward, he said, adding, “This is another tool we use.”

“It is not going to change the scope of what we need to put a case together,” said St. Johns, but he vowed, “If you give us a complaint we will follow up on that.”

The ordinance requires that massage therapists obtain a city license in addition to the state licensing they must have, pass a back ground check, and it dictates hours of operation, staffing, records and bookkeeping, and unlocked doors.

A common complaint from the business owners was that they were not included in the process of trying to develop a solution to the problem, however others said that they were involved in the process and supported the ordinance.

“We have tried to give you examples of things and you just keep shutting us down. I am appalled that you don’t give us credit. Like we don’t know what we are doing. Where is your team work with us? Have you met with all of us? No, you haven’t, and you do have an agenda and I am sorry you haven’t worked with us.”

At that point, Mayor Cole asked her not to make her comments personal. ”You would not want us to make those views personal,” he said.

The woman responded emphatically, “It is personal to me. It is very personal to us. It is very personal to each of us.”

Commented another massage therapist, “I have been told that this ordinance does not apply to me…  it pertains to everyone… it does nothing to stop the illicit sex trafficking. We have a lot of ordinances already in force that are not being used.”

A general question was asked about what happens to the victims of human trafficking. “As far as I know we have no victim services. We have to do something.”

Kukulksi said, “I don’t have any involvement. I don’t know what our community offers for services.”

Some of the business owners expressed concern about HYPPA restrictions (privacy of personal information) in the ordinance requirement that they make all their records available to police upon demand.

City Attorney Gina Dahl said that the requirement would not be in violation of HYPPA, nor is it a violation of the Constitution, as some had proclaimed.

Tax Increases Could Lead to 1 Million Fewer Jobs

21 April 2021
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The proposed tax increases in the Biden administration’s infrastructure plan could lead to 1 million fewer jobs in the first two years, according to a study conducted by Rice University economists for the National Association of Manufacturers. Economists calculated the effects of increasing the corporate tax rate to 28%, increasing the top marginal tax rate, repealing the 20% pass-through deduction, and eliminating certain expensing provisions would cause large negative effects for the economy. The worst of these would include:

* 1 million jobs lost in the first two years;

* By 2023, GDP would be down by $117 billion, by $190 billion in 2026 and by $119 billion in 2031; and

* Ordinary capital, or investments in equipment and structures, would be $80 billion less in 2023 and $83 billion and $66 billion less in 2026 and 2031, respectively.

The study also notes the following:

* Investments in intangibles, or “firm-specific capital,” are highly mobile and more sensitive to marginal tax rate changes. Such investments would fall 2.7% by year two and would be down a total of 3.8% by year five.

* The average annual reduction in employment would be equivalent to a loss of 600,000 jobs each year over 10 years.

* Real wages would fall by 0.6% in the long run, and total labor compensation, including wages and benefits, would decline by 0.6% initially before falling by 0.3% after 10 years. In the long run, total compensation would also decline by 0.6%.

Grant Could Launch TEDD Sooner Rather than Later

21 April 2021
Evelyn Pyburn
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To develop a plan to extend water and sewer into the TEDD in Lockwood was given a green light by county commissioners in discussions last week with Big Sky EDA staff.

“Get started,” directed Don Jones, Chairman of the Board of Yellowstone County Commissioners.

EDA Director Steve Arveschoug said that they would like to be ready to apply immediately for funds from the state as soon as the State Legislature determines how they want to utilize some of the funds they will receive under the $1.9 trillion federal American Rescue Plan (ARP).

The State of Montana is expecting to be allotted $2.7 billion in funds from the ARP, and Yellowstone County is expecting to be allotted $31,283,142, the most of any county in the state.

The House in the Montana Legislature has passed HB-632, and the Senate is currently debating the bill, which directs how to spend almost $2 billion of the $2.7 billion. A focus of the state legislature is to build up Montana infrastructure. The legislature has proposed that $150 million be spent on infrastructure, including water and sewer system development.

While the state legislature is moving forward with HB-632, they are still anticipating more direction from the US Department of the Treasury before finalizing details.

But once the State has finalized their program there may not be a lot of time in which to prepare a project for application, said Arveschoug, a point with which Commissioners seemed to agree. Applications to the state may be due as soon as July 1 with the awards announced in mid-October.

One of Yellowstone County’s top priorities is the development of the TEDD (Targeted Economic Development District) which involves the development of an industrial park at the intersection of Johnson Lane and I-90. One of the basic steps in its development is to extend water and sewer lines from the Lockwood Water and Sewer District (LWSD) across Johnson Lane and into the TEDD district.

“It’s a chicken and egg problem,” said Thom MacLean, project manager for EDA, “This could be the catalyst.” A TEDD functions like a “tif” district in that infrastructure is funded from tax revenues in the increment above the level at which the district was created. But, the tax revenue only increases when development happens, and development doesn’t happen without some basic infrastructure.

The “sooner the better,” urged Dianne Lehm, EDA’s Director of Community Development, “This could be an opportunity to move the TEDD forward and to get it started.” Moving forward entails the engagement of an engineering firm to prepare preliminary plans, designs and cost estimates.

“It is an initial piece… get some ball park figures,” said Commissioner John Ostlund.

“This is such an important project,” said Commissioner Denis Pitman, “This screams everything, economic development.”

“We’ve been at this six years… a lot of people don’t realize how important this project is,” said Woody Woods, who heads the TEDD advisory board, appointed by County Commissioners, who have oversight of the TEDD. “It is a game changer that will bring a lot of business and a lot of jobs.”

The Manager of the Lockwood Water and Sewer District, Mike Ariztia, was also at the meeting and said that the effort has the full support of LWSD. “Anything we can do to affect the costs is a crucial step to move forward,” he said.

The TEDD was on hold for a year while an agreement was ironed out with the City of Billings regarding the treatment of sewage, but that issue was resolved and property owners are currently in the process of applying for inclusion in the Lockwood Water and Sewer District.

MacLean further pointed out that they are also under the gun to get the project underway before the Montana Department of Transportation begins building the Johnson Lane Interchange, which is expected to begin construction next year.

MacLean said that they are estimating that extending the utility lines will cost around $1 million, given that an engineering firm’s estimate in 2019 was $800,000.

Another project that might also be considered for ARP funding, said MacLean, is to build the TEDD access road further north, which would cost about $5 million.

HB-632 allocates money for water and wastewater projects, broadband infrastructure, school districts, economic stabilization grants for businesses, housing and mortgage assistance and a range of health and human services including COVID vaccines and testing, mental health and child care services.

The U.S. Department of the Treasury is overseeing the distribution of the ARP funds and is in the processing of writing rules.

Although subject to change, it is projected that some $339 million will be allotted to counties and cities in Montana, above and beyond the State’s $2.7 billion allotment.

Montana counties will receive a total of $207,282,912. Payments will be made in two phases – the first within 60 days of enactment of the law, and the second payment no earlier than 12 months after the first payment.

While Yellowstone County gets the largest allotment of any county in the state, Golden Valley County will receive the lowest, $159,228.

Among the other urban counties, Missoula will receive $23,195,684; Cascade $15,780,435; Flathead $29,132,534; Gallatin $22,193,770; Lewis & Clark $13,465,909; Silver Bow $6,771,549 and Ravalli $8,495, 904.

And for some other counties payments will be: Carbon $2,080,048; Stillwater $1,870,007, Fergus $2,143,079; Jefferson  $2,370,188, Treasure $134,985;Rosebud $1,733,276; Richland $2,095,175; Bighorn $2,583,138; Custer $2,211,348. .

While the Montana State Legislature has authority of how to spend the $2.7 billion, other funds will be issued for specific purposes and directed to specific entities such as the community health centers. In Montana 14 centers will receive over $24 million for COVID-19 vaccinations, testing and treatment. Receiving funds are: Billings (Riverstone, the county health department), Butte, Cut Bank, Great Falls, Hamilton, Hardin, Havre, Helena, Kalispell, Libby, Livingston, Missoula and Shelby. Allotments range from less than $200,000 to more than $3 million.

Another $81 million of ARP funds will go to the state’s university system of which half may be used for student assistance.

Other funds will be distributed by the Department of the Treasury directly to entities such as school districts, agencies providing nutrition, airports and public transit systems.

According to the Rockefeller Institute of Government:

The total funds disbursed to cities and municipalities in Montana is $48 per capita, ranking the state 45th in the nation on a per capita basis.

Montana’s $2.7 billion allotment is $852 per capita, ranking it as the 10th highest among the states. The counties in the state are getting  $194 per capita, 49th highest among the states.

New York City is getting the highest allotment per capita at $316.

New York ranks 3rd per capita for allotments to counties. Pennsylvania is first with $222 per capita. Illinois ranked 4th with $200 per capita.

Wyoming ranked in first place in per capita allotment to the State at $1,858.Vermont was 2nd with $1687 per capita. Alaska was 3rd with $1393.

In overall funding – state, counties and cities — California, New York, Texas, and Florida received the most. Montana was second to last, only Alaska got less.

Contributions Capitalize EDA Business Loans to $2 million

21 April 2021
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Big Sky EDC has been awarded a $1.8 million grant from the U.S. Federal Economic Development Administration (EDA). Combined with $200,000 contributed by Big Sky EDC, the total $2 million will capitalize a $2 million Revolving Loan Fund (RLF) to be administered by Big Sky EDC for eligible small businesses located in Yellowstone County.

This new EDA RLF will provide a financing niche not only for those businesses impacted by the coronavirus pandemic, but also contribute to Big Sky ED’s continued effort to diversify the local economy. The funds will help stabilize and diversity the local economy by targeting lending to new start-up, recovering, or expanding businesses as well as stabilizing existing businesses.

Use of the RLF will be a public/private partnership within the lending community to fill financing gaps primarily brought on by the coronavirus pandemic. The EDA RLF will serve several purposes. Funds will be for commercial purposes only and used for working capital, equipment purchases and assistance with commercial real estate acquisitions.

Most for-profit small businesses located in Yellowstone County, or looking to relocate to Yellowstone County, along with business start-ups, will be eligible. Loans will range from $10,000 to a maximum of $250,000 in certain circumstances. It is EDC’s objective to assist as many small businesses as possible. Rates and terms will be competitive and depend on the use of the loan proceeds. These funds are not to be used to replace conventional commercial financing, but rather to be used in partnership with our local lenders and to fill that financing gap not completely available from the private sector.

“Big Sky EDC is very excited at the opportunity to provide this new financing option to assist with the recovery and expansion of our small business community!” – Brandon Berger, Director of Big Sky Finance at BSED.

“This gives BSED additional tools to support entrepreneurs and business growth—which is at the heart of our mission. It is all about building momentum in our economic recovery, and beyond.” – Steve Arveschoug, Executive Director. For more information please reference the recent release – U.S. Department of Commerce Invests $1.8 Million in CARES Act Recovery Assistance to Capitalize Revolving Loan Fund to Serve Businesses in Yellowstone County, Montana.

Congressional Democrats have No Business Dictating State Tax Policy

21 April 2021
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Grover Norquist, President of Americans for Tax Reform

With passage of Biden’s $1.9 trillion spending plan, Democrats are not just trying to enact higher taxes at the federal level – they are also trying to stop states from cutting their own taxes.

At the last minute, Democrats added a provision giving federal bureaucrats veto power over any tax cut from now until 2024 if a portion of the $350 billion in state and local aid is used to “directly or indirectly” offset tax cuts. This provision was inserted by Senate Majority Leader Chuck Schumer, D-N.Y., at the request of Sen. Joe Manchin, D-W.Va., in order to prevent federal dollars from “subsidizing” tax cuts. This prohibition shows the mentality of the Left – they are OK with providing states with billions of dollars to expand the size of government, but not to reduce taxes for families and businesses.

This vague standard is ripe for abuse and could be broadly applied to block tax cuts across the country for years to come.

The ban violates federalism, infringes on the sovereignty states have over their own tax policy and is an attempt to prevent competition between states.

Tax competition between low-tax states and high-tax states allows voters to see a clear contrast between success and failure. Democrats know that taxpayers have already been voting with their feet.

Over the past decade, millions of people and jobs have moved from high-tax states into states with low or no income taxes, and the ability to work remotely will only amplify this trend.

States such as New York, California and Illinois – which have been spending recklessly for decades – will still be allowed to use the bill’s funds to directly grow the size of government or bail out government union pension funds.

New Hampshire, which does not tax wage income, is looking to adopt a true no income tax by phasing out its 5% tax on interest and dividends income. Several more states – including Arizona, North Dakota, West Virginia, North Carolina and Mississippi – are currently exploring ways to put their income taxes on the path to zero.

While the Treasury Department said that Georgia’s proposal to cut state income taxes could go ahead, this is the first of many proposals the federal government may demand a say in.

Senators in swing states that voted for the provision, such as Mark Kelly, D-Ariz., Maggie Hassan, D-N.H., and Raphael Warnock, D-Ga., should explain to their states’ citizens why they want former President Barack Obama and Schumer to have veto power over state tax cuts.

Moving forward, Congress should repeal this state tax cut ban.

Fortunately, Republican lawmakers are taking action.

Sen. Mike Braun, R-Ind., and Congressman Dan Bishop, R-N.C.,) have introduced the “Let States Cut Tax Act,” legislation to repeal this provision immediately. Senate Finance Committee Ranking Member Mike Crapo, R-Idaho, has introduced similar legislation and has called on Treasury to immediately clarify the vague provision so that states are able to proceed with tax cuts.

Unfortunately, Democrats are doubling down on the ban. Last week, Braun went to the Senate floor to ask for his bill to be passed but it was blocked by Manchin.

The fact is, Congressional Democrats have no business dictating to states whether they can or cannot cut taxes. Lawmakers should immediately repeal this prohibition in order to protect tax competition and ensure well run, low tax states can continue to provide tax relief to their residents.

Bid Comes in $1 million Over

21 April 2021
Evelyn Pyburn
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The project management team overseeing the renovation of Big Sky Economic Development’s new headquarters and entrepreneurship center opened bids on April 6. While they had anticipated the possibility that bids may exceed the proposed budget they were still “taken back” that the one bid they received was a million dollars over budget.

But the county’s economic development agency remains confident that they will be able to move forward with the project to renovate the former Montana National Bank Building located at 201 N Broadway under Sky Point into what will be the agency’s new headquarters, as well as a new entrepreneurial business incubator for the Rock 31 Entrepreneur Program.

Big Sky EDA is currently located at Granite Towers at 222 North 32nd Street.

“We had one strong bid, from a good contract with very good subs,” said EDA Director Steve Arveschoug on a positive note. “The reason we didn’t get more bids, is the subcontractors are slammed right now. Their ability to take on projects is really constrained. It is going to take longer and it is going to be more costly because of a lack of trades,” said Arveschoug, who had been contacted prior to bid opening by contractors who had been interested in the project but said they would not be able to put in a bid because they could not find the subcontractors.

The problem is not unique to the EDA project – throughout the region reports are the same – construction projects are being put on hold because of a lack of construction workers, as well as because of a steep escalation in the price of building materials.

While EDA developed a budget for what was expected to cost about $3 million, the bid they received from TW Clark Construction was $4,075,000. TW Clark is a Spokane-based company with Billings’ offices at 609 Charles Street.

Arveschoug said that they will be looking for gap funding and doing some value engineering to make TW Clark’s bid work and to complete the project, which they hope to have built within one year. “We have a good project management team. Some of the leading contractors in the community,” said Arveschoug, noting, too, that the joint Big Sky EDA and EDC boards at a meeting last week urged that they move forward.

They must have a “game plan” within the next 30 days according to the parameters of the $2.1 million federal grant Big Sky EDA received from the U.S. Economic Development Administration in 2019 for the purchase of the building and renovation.

“We are going to look at American Rescue Funds that are coming to the state. They are designed to come to the rescue for economic recovery,” said Arveschoug, pointing out that their project qualifies on at least two fronts for COVID-impact funding.  EDA’s mission is to assist businesses in economic recovery and the increased costs and limited labor they are encountering are a consequence of the pandemic.

Also, the U.S. Economic Development Administration is not surprised at the outcome of the bidding process. “The regional director for the Economic Development Administration said they have seen these issues with projects all across the region. All of the region’s re-development projects that they are funding are experiencing additional costs,” said Arveschoug.

From the beginning the federal grant has been matched by local funding. There are other options for additional grant funding, including Big Sky EDA reserves and those of its sister member organization Big Sky Economic Development Corporation (EDC). The two agencies provided $2 million in matching funds for the federal grant.

Also, Arveschoug reminded that they were able to buy the building because of what was essentially an over $700,000 grant from the building’s owners Chris and Mike Nelson. “They felt very strong about this mission,” said Arveschoug, “So they made their own grant to the project and reduced the cost to us before the EDA made their grant.”

When completed the first floor of the renovated building in downtown Billings will serve as a co-working space with a coffee shop where entrepreneurs can meet and connect. The basement will serve as a work area, and the second floor will be used as a training space. The third floor will house the Big Sky EDA offices.

Big Sky EDA is a county agency serving economic development in Yellowstone County. Through a number of various economic development organizations and programs it provides resources for business creation, retention, new business recruitment and community development.

Unemployment Rate Drops

6 April 2021
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Montana’s unemployment rate dropped in February to 3.9%, after falling to 4.0% in January. The unemployment rate for the U.S. was 6.2% in February.

Yellowstone County is ranked 23rd among counties for the lowest unemployment rate at 4.4 percent, which is about .6 percent higher than a year ago. There are 76,274 people employed in the county which is 2400 less than last year.

McCone County has the lowest unemployment rate in the state at 2.3 percent which is -0.1 percent lower than last year, currently employing 954 people. Glacier County has the highest unemployment in the state at 10.2 percent, which is 1.7 percent higher than a year ago with 4,541 people employed.

Yellowstone County’s unemployment rate is higher than the 3.4 percent rate in Gallatin County. The rates in other urban counties are Lewis & Clark County, 4.5 percent, Cascade 4.8 percent, Missoula 5.2 percent, Silver Bow, 5.5 percent.

Nationally, Montana’s “bounced back” 8th best. South Dakota’s has bounced back the best and Hawaii’s the least best, according to wallethub.com.

“Montana’s unemployment rate continues its downward trend, but too many of our businesses are struggling to find workers,” Governor Greg Gianforte said. “Getting Montanans back to work in good-paying jobs and improving access to trades education and apprenticeships are top priorities as we get Montana open for business.”

Governor Gianforte has worked with the legislature to address the growing skilled labor shortage in Montana by creating the Montana Trades Education Credit (M-TEC). A central element of the governor’s Roadmap to the Montana Comeback budget, the bill, H.B. 252, provides $1 million per year in 50-percent credits to businesses for their employees to learn a trade. The funding level 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.

“Expanding trades education in Montana and empowering our workforce are critical. I look forward to this bill getting across the finish line and to my desk,” Governor Gianforte said.

Total employment in February fell by 965, and the labor force shrank by 1,521 workers. Total employment includes payroll, agricultural, and self-employed workers. 

After updating January’s preliminary estimates, payroll employment was unchanged in February, remaining at 477,700 jobs. The manufacturing and accommodation and food services industries each added 500 jobs, which were offset by job losses in construction and financial activities.

The Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.4% in February, driven by increases in gasoline prices and a rising energy index. Over the last 12 months the CPI-U has increased 1.7%. The index for all items less food and energy, referred to as core inflation, increased 0.1% in February.

Commerce Department Report: Red States Leading U.S. Economic Growth

5 April 2021
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Bethany Blankley, The Center Square

Red states are leading economic growth in the U.S., a new report by the U. S. Commerce Department shows, with South Dakota, Texas and Utah reporting the highest growth.

The report is based on 2020 fourth quarter gross domestic product (GDP) data and February 2021 unemployment rates.

Real GDP increased in all 50 states and the District of Columbia in the fourth quarter of 2020. Real GDP for the U.S. as a whole increased at an annual rate of 4.3 percent. The percent change in real GDP in the fourth quarter ranged from 9.9 percent in South Dakota to 1.2 percent in the District of Columbia.

Montana had a GDP increase of 3.6 percent.

The top three states in quarter-over-quarter growth were South Dakota (9.9 percent), Texas (7.5 percent), and Utah (7.1 percent). All three have Republican trifecta governments, with Republicans controlling the governor’s offices and both chambers of state legislatures.

Texas Gov. Greg Abbott, pointing to the report, tweeted, “The Texas economy expanded at a rapid pace of 7.5 percent in the last quarter of 2020. That means more jobs & more prosperity for Texans. Only one state – and no large state – had better economic growth than Texas. The Texas economy is fire.”

Eight of the states in the top 10 are all Republican-led states. The two in the top 10 that are Democratic strongholds are Connecticut, reporting 7 percent growth, and Delaware, reporting 5.8 percent growth.

Iowa Republican Gov. Kim Reynolds pointed to Iowa’s growth of 6.3 percent, tweeting Iowa is “The #1 state for opportunity,” with a “GDP growth faster than the national average,” and it “had kids back in school since August.”

On March 26, the New York Federal Reserve “GDP Nowcast” model, which estimates real-time economic growth, said that while the U.S. economy grew at 6.1 percent in the first quarter of 2021, it will only grow at 0.7 percent in the second quarter.

Fed analysts attribute the “negative surprises from personal consumption expenditures, manufacturers’ shipments of durable goods, and housing data” as contributing factors for the forecasted decrease. Their forecast for the entire year is roughly 6 percent growth or higher.

According to the U.S. Bureau of Labor Statistics, unemployment rates were lower in February in 23 states and the District of Columbia, higher in four states, and stayed roughly the same in 23 states, with the national unemployment rate remaining at 6.2 percent.

States reporting the highest unemployment rates are Hawaii (9.2 percent) and California (9 percent). States with the lowest are South Dakota (2.9 percent) and Utah (3.0 percent).