In a report from the Ninth District of the Federal Reserve Bank of Minneapolis, Montana is at the very top in terms of our Gross Domestic Product – or how much we produce, as compared to the other states in our district. The Ninth District is comprised of five states, including Montana.

The latest data, which is third quarter of 2024, shows that Montana has a GDP of 117.7 as compared to the next highest state, South Dakota at 111.7. We are also producing at a higher level than the US average at 114.5 – also we have had a very steep incline in the increase of our GDP, ever since COVID – exceeding all other states in the district.

Montana also has the highest percentage employment per 100 people than other states in the Ninth District and it has been steadily rising. Montana’s ratio is 111.3 as compared to the next highest, again South Dakota at 106.5. The National average is 106.3.

By Sarah Roderick-Fitch, The Center Square

The debate over whether taxpayers should be on the hook for constructing professional sports stadiums has made its way back to Capitol Hill as lawmakers look to end taxpayer subsidies for multi-billion-dollar complexes.

Reps. Don Beyer, D-Va., Glenn Grothman, R-Wis., and Sens. James Lankford, R-Okla., and Cory Booker, D-N.J., introduced bipartisan, bicameral legislation calling for the end of taxpayer subsidies to build professional sports complexes.

The No Tax Subsidies for Stadiums Act would terminate the ability for professional sporting teams to utilize tax-exempt municipal bonds to finance the construction of stadiums. The lawmakers argue that the tax exemptions were “originally intended to help local governments fund essential public infrastructure projects,” including hospitals, schools and roads.

The legislators claim the “loophole has enabled wealthy sports franchises to benefit from taxpayer dollars, often with little measurable economic return to the surrounding communities.”

The lawmakers contend that in the last 25 years, over 40 sports stadiums have been “financed” using the tax-exempted municipal bonds, claiming to have cost taxpayers “an estimated $4.3 billion in lost federal revenue.”

In February, The Center Square reported on $1.2 billion in public funds requested to help build a new stadium for the Cleveland Browns, which is estimated to cost $2.4 billion.

In 2023, The Center Square reported on another stadium project involving the construction of a new stadium to house the Tennessee Titans, requesting a $500 million bond from the state of Tennessee.

The Tax Foundation reported that, according to sports economists, over 50 years between 1970 and 2020, taxpayers “‘devoted $33 billion in public funds to construct major-league sports stadiums and arenas’” in the U.S. and Canada. Adding that the public was left “on the hook for nearly three-quarters of the costs of each new sports venue.”

In 2023, Virginia Gov. Glenn Youngkin announced a plan to build a “world-class” entertainment district in Alexandria’s Potomac Yard neighborhood to house Washington’s NBA and NHL franchises as part of a $2 billion public-private partnership.

At the time, Youngkin touted the development as a major economic boost. Supporters claimed it would generate a $12 billion economic impact for Alexandria and the commonwealth while creating 30,000 jobs. The deal to move the teams across the Potomac has since died.

Despite the governor’s claim, The National Conference of State Legislatures says the “economic impact of stadiums” on cities “is negligible.” However, construction of new stadiums does create jobs, such as, construction and seasonal employment.

NCSL questioned the “quality of the jobs,” citing stadium workers and “game-day personnel,” who often perform “low wage, temporary and part-time” work.

Beyer, whose district includes Alexandria, argues that taxpayers shouldn’t be “forced to fund” sports complexes. “Billionaire owners who need cash can borrow from the market like any other business. Arguments that stadiums boost job creation have been repeatedly discredited. In a time when there is a debate over whether the country can ‘afford’ investments in health care, childcare, education, or fighting climate change, it is ridiculous to even contemplate such a radical misuse of publicly subsidized bonds,” said Beyer.

Those advocating to expand passenger rail service in Montana, the Big Sky Passenger Rail Authority (BSPRA), hang in limbo as HB 848 is pending in the state legislature, which would create a “Big Sky Rail Account” which would contribute to the estimated $2 billion price tag for a second rail line through southern Montana — the Big Sky North Coast Corridor, which would extend from Seattle to Chicago. (Amtrak’s Empire Builder passes through northern Montana.) 

“It would not be inconceivable,” said BSPRA Chairman Dave Strohmaier, that the cost for the line, “would be upwards of $2 billion for a 2,300-mile long route.”  He said a key component of their strategy is securing support from local governments and municipalities.  BSPRA has garnered pledges of support from numerous cities, including Billings, and counties in Montana, which implies commitments of local funding, in addition to federal funding, and anticipated state funding.

 HB 848 was introduced by state Rep. Denise Baum (D-Billings). It has passed the House and transmitted to the Senate.

Stephen Gardner, Amtrak’s CEO, recently resigned his position. The uncertainty of federal funding and priorities poses additional uncertainties regarding the future of the Big Sky North Coast Corridor.

By Haley Chinander, Federal Reserve Bank of Minneapolis

Companies reported in a survey that profits and revenue declined, and some observed that additional economic uncertainty made already price-sensitive customers more skittish. The January survey received 568 responses from business owners across the Ninth District of the Federal Reserve Bank which includes Montana.

Amid this uncertainty, more businesses reported pulling back on hiring but for varying reasons. Many respondents mentioned that heightened labor costs hindered their ability to hire, while others noted that improved labor availability and slower turnover lessened their hiring needs.

Businesses also said that price increases moderated since last year, and their outlook was solidly positive.

Revenue declined for 44 percent of firms compared with the same quarter last year. Profits were also reportedly lower for nearly half of firms.

Expectations for future revenue and profits leaned negative as well, with 36 percent of respondents expecting declines in revenue over the next quarter and 30 percent expecting revenue to increase.

Respondents noted that heightened input and labor costs continued to chip away at their profits. Many also mentioned that their customers or clients were increasingly tightening their belts and unwilling to make large purchases.

“It appears that inflation is really having an effect on people’s spending,” observed the owner of a Minnesota accommodation business. “People generally have less to spend, thus we have seen a decrease in our gross revenue.”

Other respondents mentioned that increased economic uncertainty, especially due to proposed changes in federal policy, was creating concerns about future input costs and demand. “We are anxious about any possible tariffs,” wrote a North Dakota alcohol beverage retailer. “We significantly felt the impacts of the last round of tariffs in 2018 [and] 2019. We tried to stock up in advance of price increases to be competitive.”

Unusual winter weather patterns also continued to impact businesses in different ways. Some retail and accommodation businesses that depend on winter weather saw improved snow coverage and lower temperatures this year. “We are a motel that caters to winter sports enthusiasts, the amount of snow this year … has made a significant increase in business,” commented a respondent in the Upper Peninsula of Michigan (U.P.).

Other businesses, even within the same state, weren’t so lucky with snowfall. A resort owner further west in the U.P. reported poorer snow conditions: “We took on this business because past numbers looked good,” but there’s “no winter up here and no winter tourism anymore.”

As heightened costs and economic uncertainty strained firms, hiring slowed to its lowest levels in the last three years. Nearly half of businesses were not hiring, and of those that were, only 18 percent were looking for new full-time workers.

The reasons for this pullback in hiring varied among respondents. Many pointed to declining revenue and difficulties affording wages. “Employees expect better pay. I’m not saying they don’t deserve [it]. Just that we can’t afford it,” wrote the owner of a Twin Cities construction firm.

Notably, most businesses were still reluctant to reduce staff despite declining revenue and heightened costs. Only 8 percent indicated they were actively cutting staff, and a majority expected numbers to simply stay flat in the next six months.

Some business owners mentioned other ways of alleviating labor costs without reducing staff. “We’ve been on reduced hours in our manufacturing area … due to reduced customer orders,” wrote a manufacturer in the U.P.

“We had to cancel health care & other insurance coverage for our staff due to high costs,” added the owner of a Minnesota retail business.

Other firms pulled back on hiring because they had success in becoming fully staffed as labor availability improved. Turnover was reportedly flat for three-fourths of firms, and the share of respondents that said getting new hires was “extremely difficult” was at its lowest levels in two years (see Figure 3).

“We have no turnover; We are seeing a marked increase in qualified applicants for our open positions over one year ago,” observed a North Dakota manufacturing firm owner.

“It seems like we are retaining employees better,” the owner of a South Dakota janitorial firm wrote. “We have improved our training, but I sense there’s less jobs available right now.”

Governor Greg Gianforte, Senator Josh Kassmier, R-Fort Benton, and local ag producers are urging support for reforms to the business equipment tax. Gov. Gianforte and Sen. Kassmier support a reform to permanently eliminate the tax’s burden for an additional 700 small businesses, family farms, and family ranches.

“With hardworking Montanans in mind, we’re once again prioritizing historic business equipment tax relief, eliminating this tax burden for more Montana small businesses and family farms and ranches,” Gov. Gianforte said. “Taxing critical business equipment makes it harder to grow a small business and is a wet blanket on job creation. Let’s continue our progress to eliminate the burden.”

Since 2021, Sen. Kassmier has led the charge in the Legislature to ease the burden of the business equipment tax for small businesses and family farms and ranches. Between 2021 and 2023, then-Rep. Kassmier sponsored bills, which the governor signed into law that expanded the business equipment tax exemption from $100,000 to $1,000,000 eliminating the business equipment tax burden for more than 5,000 small businesses, farms, and ranches.

“This is important because inflation keeps hitting these farms and ranches, the price of equipment keeps rising, and it doesn’t take long to get to $1 million with just a couple pieces of equipment. Raising the exemption to $3 million will help get another 700 farmers and ranchers off this tax roll and allow them to be able to invest in their operations and employees,” Sen. Kassmier said. “I appreciate the governor’s work and leadership on this, and I look forward to raising the exemption.”

During a visit to Circle View Farms in Fort Benton, Gov. Gianforte and Sen. Kassmier met with fourth-generation owner Brent Hanford on the importance of raising the exemption to take more farms and ranches off the business equipment tax roll.

“The business equipment tax is taxing equipment you bought with money that was already taxed. It shouldn’t be happening in the first place, but raising it from $1 million to $3 million would greatly help, especially small farms and ranches and businesses – to keep that money to put back into the business to keep it going,” Hanford said.

The governor and senator also heard from Eric Gray, owner of Heartland Seed and farmer in Highwood.

“I’ve been really lucky. As I’ve gotten into farming over the last few years here, and back helping my dad on his operation, I’ve been able to start accumulating my own equipment line and the business equipment tax has been stepped up, so I haven’t had to worry about it. So, increasing the exemption will only continue to help,” Gray said.

Gray continued, “When you start looking at $500,000 to $1 million for a combine, depending on what you buying, $1 million are for the exemption doesn’t go very far – you can tie that up in a hurry.”

Montana’s business equipment tax requires small businesses and family farms and ranches to reallocate resources, which they would otherwise use to invest in their operation and create jobs, to pay a tax on the equipment and machinery they need to operate.

The business equipment tax also imposes a costly compliance burden, with businesses required to inventory and report their equipment to the state each year.

Reducing the burden of the business equipment tax on Montanans, Sen. Kassmier’s Senate Bill 322 continues to encourage business investment and promote job creation. The bill was scheduled to be heard in the Senate Taxation Committee on March 27.

By Evelyn Pyburn

Yellowstone County Commissioners are taking a hard look at moving the county’s Election Department, in its entirety, to Metra Park.

With the Election’s Department Director, Ginger Aldrich, concerned about not having enough space for the Department to perform its functions, especially after what was experienced in the November general election, County Commissioner Mike Waters took on the challenge of delving into the problem to come up with a solution. At Wednesday’s discussion meeting county officials reviewed the options, challenges and recommendations.

Waters and Aldrich’s top recommendation is to do some renovations of Cedar Hall at MetraPark and make it the one-stop location for most aspects of conducting elections. While the move will not provide all of the space that Aldrich projected as needed it does come close and offers many benefits.

Such as: The location of MetraPark is well known to everybody and many people are already used to going there to vote. The location has ample parking and plenty of space to accommodate dropping off ballots. And perhaps most beneficial is that ballots remain in one location which generates more public confidence in the integrity of elections.

Other options that were scrutinized included splitting operations between the new administration building, which is in the process of being refurbished for county departments, and to continue to lease space from Wells Fargo, which is a solution that has been used in the last two years. Waters said he was anxious to end the cost of that lease.

Another suggestion was to continue with the plan to have the main “front facing” Election office in the County Administration Building (CAB), the former Miller Building, and perform some of the other functions in the Cedar Hall location. Aldrich and some of those working for the department commented that it was one thing to have to walk back and forth between the Election’s office and the Wells Fargo Building (often as many as five times a day) and quite another to have to drive back and forth from the CAB and MetraPark. It also increases concerns about security and election integrity.

Aldrich also announced out that the City of Billings offered first floor space in their new office building (the Stillwater Building) at a “very generous rate.” While the distance between the Stillwater Building and the CAB is greater than that of their current office and Wells Fargo, it would still be doable, and the great entry way into the Stillwater Building would accommodate the long lines that often occur for Elections.

Kevan Bryan, Director, Office of Management Budget at Yellowstone County, expressed concerns about the fact that the Cedar Hall location will still not meet all of the space that Aldrich, initially, estimated as needed.

Waters’ provided a statement regarding the positive aspects that the Cedar Hall option provides:

“The strength of this option is based on the fact that it can be used to maintain the front-facing office and the operational side in one place. This is a significant advantage and the Elections Department is willing to configure a smaller space specifically to ensure both registration and ballot processing stay together. Management of election judges and registration in two areas is challenging when they are one block apart. Separating them by more than a walkable space would not allow effective oversight or management of both registration and ballot processing.

The ground level space provides positive aspects for:

— Accessibility of the public including disabled and elderly voters

— Movement of mail, ballots, and other bulky items such as polling place material drop off by county staff and election judges

–Negates the need for adequate elevator space / a freight elevator

Rejected ballots and other materials flow between the registration office and the operations side. Unifying these processes ensures:

— Temporary election judges work under direct supervision from permanent staff

— Ballots and other election materials remain within the custody and control of election space, rather than having to move between spaces with additional paperwork requirements and the logistics of moving those materials to another site.