Government

Home Ownership Near Impossible for Young

22 July 2024
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Current economic conditions are proving to be especially difficult for the young, according to a recent report in Epoch Times.

The obstacles holding younger generations back include historically high home prices, stagnant inflation, debt and spending habits, and wages.

And, according to the National Association of Realtors (NAR) home prices aren’t going to go down any time soon. NAR reported the highest ever national median sales price of $419,300 for a single-family home in May.

“We’re actually forecasting that home prices will continue to grow based on the lack of inventory and demand for home ownership,” Jessica Lautz, NAR deputy chief economist and vice president of research.

A $400,000 price tag translates to a $40,000 down payment—with the usual requirement of 10 percent of the home cost.

Millennials born 1981 to 1996, and Generation Z, born 1997 to 2012, face an uphill battle on the path to first-time home ownership, particularly in the years following the COVID-19 pandemic.

Factors impacting home affordability for the younger generations include historically high prices, three years of stubborn inflation and interest rates, personal debt and spending habits, unemployment, restricted development, and wages. And, often burdened with student loan debts, limited incomes and facing high interest rates, would-be young home buyers have trouble qualifying for any mortgage.

At current prices a single family would have to spend $4,000 or $5,000 a month in mortgage payments. In addition many areas have limited inventory.

The average homebuyer’s monthly housing payment is $2,829. That’s $30 less than the record high in April but more than double from three years prior. In 2021, the median monthly mortgage payment was $1,242, compared with $972 in 2011, according to Bankrate.

Using economic data on historical home prices and household incomes from the Federal Reserve, a Visual Capitalist report illustrates how, in 1984, the house sales price-to-income ratio was at 3.49 as the median annual household income for Americans was $22,420 and the median house sales price was $78,2000.

That ratio climbed to 5.8 in 2022 as the median household income rose to $74,580 while median house sales prices skyrocketed to $442,600 in quarter four. The ratio, however, dropped to 4.9 in 2023, according to a 2024 Harvard report. It remains, however, unaffordable for many households.

While Federal Reserve data indicate that between 1971 and 2024, the current interest rate of 6.86 percent has stayed below the historic highs of 18 percent or more seen in the early 1980s, interest rates soared after hitting historic lows of 2.65 percent in January 2021. This was due to the Fed raising interest rates to combat inflation, which significantly increased mortgage rates on homes.

Mortgage down payments are also high. The home marketplace Zillow released a June 20 study that found that for a “typical” U.S. home valued at roughly $360,000, home buyers with a median income would need to put down nearly $127,750 to secure a mortgage that would ensure monthly payments were 30 percent or less of their monthly income.

The annual inflation rate in June 2022 climbed to 9.1 percent—the largest increase in 40 years. The current rate of 3.3 percent is still significantly higher than the average 0.1 percent seen in 2015.

For young Americans who can only afford to rent, more of their income goes to rent than in years past. The average proportion of a person’s income that goes to rent was 25 percent in 2000, and it’s now 40 percent. A study by Susan Wachter, a professor of real estate and finance at the Wharton School of the University of Pennsylvania, found that 49 percent of those aged 18 to 29 chose to live with their parents in 2021, up from 27 percent in 1960.

While year-over-year wages grew considerably after the pandemic for those under 40, data from the Federal Reserve Bank of Atlanta show that wage growth peaked in 2022 before falling each subsequent year as median home prices continued their ascent.

Unemployment rates also ballooned during the pandemic, rising to 14.8 percent in April 2020. The rate plunged as the economy slowly recovered, dropping to 3.4 percent in 2023 but rising slightly again to 4 percent in May.

A June 24 research study from Lending Tree analyzed more than 428,000 anonymized credit reports from users in 100 largest U.S. metropolitan areas. It found that 97.1 percent of Gen Zers possess non-mortgage debt of some kind. Roughly 80.8 percent owe credit card debt, and the median non-mortgage debt for that age group hovers around $16,562.

The numbers are even higher for millennials. Non-mortgage debt averages $30,558, while 38.4 percent have student loan debt, the highest for any age group. Millennials are also the second most likely age group to have personal loans with 16.8 percent owing a median balance of $2,921.

Grant will Provide EV Buses for SD2

22 July 2024
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A government grant of $3.2 million will purchase electric school buses for Billings School District 2 this coming school year in partnership with First Student, the district’s transportation contractor. The grant, through the Montana Department of Environmental Quality (DEQ) will cover the cost of purchasing the buses and constructing the charging infrastructure.

According to reports the cost of an electric school bus is about $400,000 – about four times the cost of a diesel school bus.

Public schools are claiming a new reasoning, besides a threat of global warming, for using electric vehicles. They are concerned about the exposure to diesel exhaust for children. They point out that diesel exhaust is a known carcinogen, to which children are being exposed on a daily basis.

The electric school bus has no exhaust to be concerned about.

Havre School District used electric school buses last year, to high acclaim. Not even cold weather was a detriment, they reported. Apparently, researchers are finding ways to enable EVs to deal with the cold. A system, called e-Thermal bank, is separate from the main EV battery and combines a chemical heat pump with microwave energy to produce heating or cooling on demand. Researchers estimate that the e-Thermal bank can deliver a range extension of up to 70% at a cost that is less than expanding battery capacity.

Billings is apparently getting the federal funds to buy the buses because Billings is included in a federal “Clean Cities program”. Billings and other Montana cities, as well as communities in Idaho and Wyoming are part of a special region called Yellowstone-Teton Clean Cities or YTCC’s.

YTCC functions as the Department of Energy’s on-the-ground advocate focused on petroleum displacement activities in the Greater Yellowstone Region. YTCC’s mission is to reduce consumption of traditional petroleum-based fuels in the three- state region; encourage and expand the use of alternative fuels, and advanced vehicle technologies by promoting other transportation options.

 Other than YTCC, the Clean Cities Program has about 90 communities targeted.

Other cities included in YTCC are Bozeman, Big Sky, West Yellowstone and others surrounding Yellowstone Park – – as the federal government is making an effort make the greater Yellowstone Region the focus of a petroleum displacement area.

Many of the cities are getting funds to build electric charging stations.

Goal: Zero Traffic Deaths

22 July 2024
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As traffic safety partners across Montana prepare to meet this month, roadway fatalities continue to be a primary concern. In 2023, 208 people died on Montana roads, and Vision Zero – zero deaths and zero serious injuries on Montana roadways – remains the goal. Statewide crash trends will be one agenda item of discussion at the (https:// mdt.mt. gov/visionzero /plans/ chsp.shtml) Executive Leadership Team (ELT) virtual meeting scheduled for Thursday, July 25, from 1 to 3 p.m.

“Despite challenges, leaders across the state continue to work together with a common goal of Vision Zero,” said Larry Flynn, Deputy Director of the Montana Department of Transportation (MDT). “Zero is the only acceptable number of lives lost on Montana’s roadways, and MDT looks forward to continued collaboration and coordination with our partners statewide to work towards that goal.”

The agenda for the meeting includes:

– Public Comment

– Comprehensive Highway Safety Plan Overview

– Statewide Impaired Driving Work Plan Approval

Arraignment Court Planned

22 July 2024
Evelyn Pyburn
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By Evelyn Pyburn

Some time this summer Yellowstone County will initiate an arraignment court.

The need for an arraignment court in Yellowstone County has been growing and it will become essential once the proposed short-term holding facility becomes a reality, according to Yellowstone County’s Justice of the Peace David Carter.

Judge Carter is currently in the process of gathering data about how many defendants pass through the courts  – municipal courts of Billings or Laurel, justice court, and district courts  — each week. “We are trying to see what the work load will look like and how to manage it on a daily basis,” said Judge Carter.

“This is significant change,” said Carter, pointing out that it will affect almost all aspects of how the court system operates, requiring a lot of changes of judges, clerks, detectives and law enforcement officers.  “We are going to try it this summer. There will be some trial and error,” he said.

This will be the first arraignment court in Montana. It is meant to address the needs of the short term holding facility that the county and city have collaborated to build. The county accepted applications this week for a general contractor to oversee its construction, which is anticipated to take about a year. The facility will hold inmates for only 72 hours. It is viewed as one of the solutions to the over-crowed jail that serves Yellowstone County. It will enable law enforcement to arrest and hold those perpetrating minor offenses, for whom in the past they have not been able to jail because of having no place to hold them.

A primary goal of having an arraignment court is to relieve some of the pressure on the processing requirements in the other courts.

What’s an arraignment court?

It’s a defendant’s first appearance in court – the first time they appear before a judge. Judge Carter said anyone having seen the television show “Night Court” may have an idea what it is, but the arraignment court for Yellowstone County is not going to be held at night – nor will it have Judge Harry Stone or a “Bull” Shannon.

In many larger court systems the defendant is arraigned before they ever go to jail, but if that doesn’t happen, the arraignment still must happen within a reasonable period of time after arrest, usually within 48 to 72 hours. The short term holding facility creates a need for the arraignment to happen very promptly.

During the arraignment, a defendant is formally advised of the criminal charges against him, informed of his rights, and may be asked to enter a plea to the charges. The court may also decide at arraignment whether the defendant will be released pending trial.

It involves a process of sorting out the charges against a defendant in accordance with state laws or local ordinances, looking at their criminal record and determining, if there are other outstanding charges, misdemeanors or felons. Quite often a defendant does have other pending charges and perhaps outstanding warrants, or instances of having failed to appear in court, explained Carter. “Someone may be on probation, have felonies or is a fugitive. A lot of people arrested in Billings have warrants from other cities or from outside the state,” explained Judge Carter. Determining those facts dictates in which court – municipal, justice or district — they are charged and what the charges will be, making sure there are no contradictions in the records.

Oversight of an arraignment court must be an attorney who is either elected or appointed by the County Commissioners. Besides deciding the charges and the court, they decide  such things as whether there will be a bond and if so how much, or will the defendant be required to have a GPS ankle bracelet or will there be alcohol monitoring, etc.

The goal is to harmonize their appearance in court and to communicate what they have to do, set a schedule and to direct the right pace to go,” said Judge Carter.  The point is “to cycle people through quickly and not to have wasted space.”

Bureaucratic Rule Change Threatens Ag

22 July 2024
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A lawsuit filed on June 12, by the American Farm Bureau Federation and 11 other groups, challenges the lawfulness of the Bureau of Land Management’s Public Lands Rule, which threatens the future of ranching in the U.S. by destabilizing a decades-old tradition of grazing on federal lands.

Gary Heibertshausen, a sheep rancher in Montana and Farm Bureau member, says access to public lands for livestock grazing is crucial to the success of his ranch. “If Willow Creek Partners could not graze its livestock on federal land, we would be forced to sell our sheep and cease operating as a ranch.”

Heibertshausen and his partners hold six grazing permits covering several thousand acres of federal lands. He is supporting the case, saying the BLM rule creates substantial risk and uncertainty for ranchers, adding, “Under the rule, we can no longer be certain that the public lands on which we currently rely for grazing will remain available for grazing over the coming years.”

BLM issued the final rule in May with a stated goal of increasing the health and resilience of public lands, but a lack of clarity in the rule and changes in policy that are not authorized by law make it unacceptable. The rule also makes it more difficult for ranchers to play an important role in the stewardship of public lands.

AFBF President Zippy Duvall said, “Further restricting grazing on public lands takes us backward not forward because ranchers are delivering a return on the trust placed in them to care for public lands. They are clearing brush that could fuel wildfires, controlling invasive species, and bringing overall health benefits to the land.”

The benefits of grazing range from reducing wildfire risk and slowing the spread of invasive weeds to building robust root systems and spurring forage growth for native species. The misguided Public Lands Rule threatens the important balance our country has achieved on public lands, as well as the future stability of the many ranches that depend on grazing permits.

BLM oversees approximately 245 million acres of property in the West, which amounts to one-tenth of all U.S. land. For nearly a century, farmers and ranchers have worked with the federal government to ensure Western land can be used for both public enjoyment and agricultural use. So the rule changes to the management of public lands have broad implications for agriculture and the future for America’s ranchers.

Unemployment Remains High

11 July 2024
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Early summer brings work and a traditional decline in unemployment insurance (UI). In May, about 70,000 Ninth District workers received weekly UI benefits. That’s about half of January’s levels, but UI levels historically decline with warmer weather. Current levels are 17 percent higher than last year but still a 5 percent gap from 2019 levels. The gap would be much wider—closer to 20 percent—without last year’s change in Minnesota law allowing hourly school workers to claim unemployment benefits in the summer. For other recent trends, see the Minneapolis Fed’s Regional Economic Indicators.

State Grants $2.6 million to Film Industry

11 July 2024
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Since the Montana State Legislature created a taxpayer funded program in the hopes of attracting Hollywood –style business to Montana, the Montana Department of Commerce recently announced $2.6 million in grants to 67 film creations statewide.

The program is called the Big Sky Film Grant program and this year there were 150 projects requesting $9 million in funding.

The Montana Department of Commerce announced that 67 film creations will share more than $2.6 million in subsidies to film on-location productions across the state.

Grants were made available from Feature Film and TV; Feature Film and TV – Resident Only; Short-Form Content; and Short-Form Content – Resident Only categories.

A sampling of some of the recipients include:

—  7030 Entertainment, LLC  – –  $50,000 for the production of “Cold Storage.”

— Attack Team Entertainment Inc.  – –  $50,000 for the production of “Where the Wild Horses Live.”

—  Eat Different, LLC will revive $100,000 for the production of “Inhuman.”

—  FMLY Films, Inc.  – –  $50,000 for the production of “Lunatic.”

—  Hold The Map Productions, LLC  – –  $50,000 for the production of “Breaking the Silence.”

—  Justin Olson, ETC FILM, LLC  – –  $150,000 for the production of “Earth to Charlie.”

—  Last Chance Pictures, LLC  – –  $50,000 for the production of “Good Kids.”

—  Michael Polish, There There, LLC  – –  $100,000 for the production of “There, There.”

—  MMM MT, LLC  – –  $50,000 for the production of “Swimming Hole.”

—  Nathan Norby, LLC  – –  $50,000 for the production of “The Price of Paradise.”

—  Paradise Valley Pictures  – –  $100,000 for the production of “The Gift of the Game.”

— Stillwater Historical Society, Museum of the Beartooths will receive $50,000 for the production of “Moccasins, Mining and Montana’s 34th County.”

“Commerce’s Film Office promotes Montana as a business destination for film production companies to expand production in our state, increase job opportunities, promote small business growth and to promote tourism,” said Paul Green, Director of the Montana Department of Commerce. “These 67 film projects are expected to spend an estimated $35 million in Montana and will bring in productions that will help boost the economies of many rural Montana communities, including Plentywood, Cohagen, Lame Deer, Poplar, Dillon, Clyde Park, Choteau, Pryor, Roberts, Virginia City and Pray.”

The richest in Montana…

Based upon the average net worth of its citizens, the richest city in Montana – not surprisingly —  is Bozeman followed by Whitefish. Belgrade comes in as the third richest – undoubtedly as spillover from Bozeman. Then its Columbia Falls, followed by Billings, Helena, Missoula, Laurel, Livingston, and Kalispell.

NFIB Urges State Delegation to Act Faster

11 July 2024
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The most recent release of NFIB’s monthly Small Business Economic Trends report didn’t vary much from previous dismal ones, but it did reveal a more troubling finding that prompted the Montana state director for the association that publishes it to call on the state’s Congressional delegation to act faster on two issues that would help reverse small businesses’ slide. 

“The small business sector is responsible for the production of over 40% of GDP and employment, a crucial portion of the economy,” said Bill Dunkelberg, chief economist for NFIB. “But for 29 consecutive months, small business owners have expressed historically low optimism and their views about future business conditions are at the worst levels seen in 50 years.” 

Ronda Wiggers, NFIB’s Montana state director, said it’s time for Congress to act. “I’m very proud of our State Legislature for not exacerbating a very serious problem but instead initiating helpful measures to ease the problems of small businesses. I wish Congress would do the same. It needs to act now on two issues that would greatly help with a national recovery along the Main Streets of the nation. I commend Sen. Steve Daines and Congressman Ryan Zinke for their leadership on one of the issues and ask Sen. Jon Tester and Congressmen Matt Rosendale to join them in not letting the Small Business Deduction expire. Then, I’d like all four to unify in freeing Main Street, mom-and-pop companies from the vise grip of the Corporate Transparency Act.” 

In a guest editorial in The Washington Times, which preceded NFIB’s Fly-In week of small business lobbying activities, NFIB President Brad Close described the consequences of both issues. 

“The first and most important thing Congress should do is cut small businesses’ taxes permanently,” wrote Close. “The small-business deduction — the small-business centerpiece of the 2017 tax cuts — expires next year. If lawmakers allow that to happen, Main Street will face an unprecedented tax hike. At least half of the nation’s small businesses are uncertain about their future. They’re holding back when they want to be ramping up. With disaster already beginning to unfold, Congress should act immediately. 

“… The second thing Congress should do is end a particularly burdensome mandate — the ‘beneficial ownership’ reporting requirement. Created in 2021 and enforced since January, it’s 100% targeted at the smallest of small businesses, wrapping them in red tape while giving big business a pass. 

“Under this mandate, more than 32 million small businesses must regularly send private personal information about their owners to a federal database. If they don’t, they face up to two years in prison and a $10,000 fine. Would any member of Congress like to tell a small-business owner that they deserve to go to prison over this?” 

The Immigrant Population of The Ninth District Has Grown

9 July 2024
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By Erick Garcia Luna

Since January 2020, employers across the United States have filled the job hole created by the pandemic, plus another 5 million jobs. That ability to hire suggests there is an expanding labor pool. The growing foreign-born1 population is a contributing factor.

In the Minneapolis Fed’s Ninth District, foreign-born growth rates have been robust, and the share of the labor force comprised of foreign-born workers has increased. Still, compared with the national average, the concentration of foreign-born workers remains relatively low in district states. (Foreign born means they were not born in the US, and pertains to both citizens and non-citizens.)

After declining early in the pandemic, the U.S. foreign-born population bounced back strongly. According to the Current Population Survey, from 2010 to 2023, the foreign-born population grew by 30 percent, more than three times faster than the native-born population.

There are other differences among groups. Foreign-born men tend to participate in the labor force at higher rates than native-born men and women, regardless of nativity. Among women, rates tend to be slightly higher among native-born workers.

But the gap seems to be closing, and quickly in some cases. In Minnesota, labor force participation among foreign-born women has been higher than that of native-born women since 2021.

The foreign-born labor force is also relatively younger. Across the country, about 70 percent were between the ages of 25 and 54—what economists call the “prime” labor force—compared with 62 percent of the native-born labor force. That younger share is even higher in some Ninth District states, like North Dakota, at 82 percent.

Fast growth among the foreign-born workers means their slice of the labor force is also growing.

Nationwide, 18.6 percent of the total labor force in 2023 was foreign-born, up from 15.8 percent in 2010. Despite high growth rates among district states, their labor force shares still lag far behind that national average. At the top, Minnesota’s labor force share of foreign-born workers was 10 percent in 2023. At the bottom, Montana’s share is just 3 percent despite having seen 55 percent growth in foreign-born workers since 2010.

In North Dakota, a much higher growth rate among the foreign-born population has pushed its labor force share from about 3 percent in 2010 to almost 7 percent in 2023.

Over the years, North Dakota has worked particularly hard to integrate people from around the world into the labor force.

“We want new arrivals to have the same opportunities as everyone else,” said Janna Pastir, deputy director of the North Dakota Department of Commerce Workforce Development Division. “Coordinated language, adult education, and digital skills programming help integrate immigrants to meet the needs of our economy.”

Governor, Chamber of Commerce Highlight Business Climate

9 July 2024
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Joining the Montana Chamber of Commerce, Governor Greg Gianforte highlighted recent investments to improve Montana’s business climate at the Big Sky, Bright Futures Economic Summit in Bozeman.

“With record business creation and more Montanans working now than ever before, it’s clear Montana’s economy is on the move,” Gov. Gianforte said. “Thanks to our pro-business, pro-jobs policies we’re welcoming investment across all industries. We’ll continue to cut red tape and make Montana an even better place to do business and create new opportunities for Montanans.”

Talking with Montana Chamber President and CEO Todd O’Hair, the governor outlined his priorities to continue lowering taxes, reducing red tape, attracting new businesses, building the workforce, and addressing Montana’s housing shortage.

Last spring, the governor was proud to deliver the largest tax cut in state history, providing income tax cuts for Montanans at every level, as well as immediate and long-term property tax relief.

Since taking office, Gov. Gianforte has prioritized investments to develop a highly-skilled, highly-qualified workforce. In 2023, the governor nearly doubled the Montana Trades Education Credit, offering employers credit for employee education and training and expanded work-based learning opportunities for Montana students.

In addition, the governor has reformed the state’s tax code to promote business investment and job creation, attracting businesses from around the world to Montana.

And to meet the growing demand for housing, the governor last October reconvened his Housing Task Force following a historic legislative session for pro-housing reforms that some have dubbed the “Montana Miracle.”

“This is a pivotal moment for business in Montana,” said O’Hair. “Companies are increasingly drawn to the unique opportunities Montana offers, making our state a prime destination for growth. To sustain this momentum, we must address key challenges like housing and childcare.”

Gov. Gianforte talking with BHE Montana President Nancy Murray at the Big Sky, Bright Futures Economic Summit in Bozeman

Wrapping up the afternoon, the governor also highlighted his focus on Montana’s all-of-the-above energy policy in a fireside chat with BHE Montana President Nancy Murray.

As a subsidiary of Berkshire Hathaway Energy, BHE Montana earlier in the day announced their latest investment in two new renewable energy projects in Montana.

The first, a 100-megawatt solar project on 1,000 acres of land in north central Montana. The installation of 200,000 solar panels is expected to add 100 megawatts to the grid by 2026. And the other, a 75-megawatt battery in Ethridge to store energy from BHE Montana’s wind and solar generation assets by 2025.

“We are incredibly excited to build upon the significant investments we’ve already made to further develop energy resources in Montana,” Murray said. “These new projects reflect our commitment to grow our business in Montana and support the growth of local businesses and communities that rely on a clean and resilient energy grid.”

Gov. Gianforte added, “Montana continues to be on the cutting edge of innovation, including in our energy sector. We will continue to embrace our all-of-the-above policy to address energy affordability and grid reliability and gladly welcome this investment from BHE Montana.”

Creating the best environment for business and more opportunities for Montanans is a top priority of the Gianforte administration.