Government

Could Have Been Worse, 2021 Looks Promising

4 February 2021
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As bad as it was, the experience of other states shows that it could have been much worse for Montana.

While the economic restraints that were imposed because of COVID-19 has had a profound impact on the economies of Montana and the nation, “the surprise is that Montana’s job setback, while severe, has been milder than all but a handful of predominantly Mountain West states,” reports Patrick Barkey, Director of the Bureau of Business Research (BBER) at UM, which hosted a review of the state’s economy in a virtual program on Feb 1 and 2.

“To say that this has been a surprise is an understatement,” said Barkey. “The closure of the international border, the huge declines in air travel and the turbulence in oil market seemed to be formidable headwinds for many of our key industries. Yet the opportunities that the COVID-19 pandemic has presented Montana businesses, which are too numerous to list, have helped fill at least part of the hole,” Barkey wrote in the Montana Business Quarterly, published by BBER.

Usually each year the BBER conducts a tour of the state’s major cities presenting half-day seminars that provide a broad range of information about the state’s economy. This year, because of COVID restraints, the format changed to a two-day “zoom” conference, featuring a broad range of speakers.

In general, the state’s leading economists predict that Montana will, economically speaking, rise above the obstacles that the virus has thrown at us, but things will be different and there remains a lot of uncertainty.

“The state economy enters the new year with both momentum and uncertainty,” said Barkey. Predictions are difficult because “…the connection between economic growth and public health is not that simple anymore.”

Recessions of the past predominantly hit one market segment over others, but the COVID recession “left no corner of the state’s cities and regions untouched,” according to Barkey, “…it has unfolded in a way that bears little resemblance to previous economic downturns.”

Montana’s economic performance in 2020 “will undoubtedly go down as the worst in its post-war history.”

“Over the first two quarters of last year, Montana suffered a 8.2% payroll job decline, amounting to almost 39,000 jobs. The job losses were disproportionately felt in two industries – accommodations and food (28.1% decline), and arts and entertainment (27.3%) – that were most challenged by physical distancing. With the exception of government, however, no industries were spared. Health care’s job declines were especially surprising, given that the downturn was produced by a health crisis.”

With our focus on the number of jobs lost, there has been less awareness that wages in Montana did not decline in the same manner. On average income levels were minimally impacted. The reason:  jobs lost tended to be lower paying jobs, and in many cases Montanans who retained their jobs were called upon to work more hours.

Much of the data relating to the status of the state’s economy is still coming in, making projections for 2021 difficult. 

While the BBER’s forecast for 2020 was a growth rate of 2.3 percent for Montana, the reality is it may have declined to -2.1 percent. Not all the Montana data is in, but when it is “the growth rate for 2020 is estimated to be worse than the Great Recession of 2008-09.”

Nationally, COVID uncertainties make for greater unpredictability, but a decline in COVID concerns and greater confidence, “could make actual growth surpass the projections.”  Posing as a concern is the long-term impact on business of the “aggressive” actions of government.

The US economy will move slowly into 2021, accelerating as the year progresses. Growth next year is projected to be 4.2 percent “significantly above the long-term trend.”

Barkey predicted that investors in the national economy will focus more on segments of the economy connected to government, such as environmental and social issues. Banks, globally, will face greater risks, prices are likely to rise on finished goods and stabilize for services, which were pushed down by depressed demand.

Around the State, COVID Impact Much the Same

3 February 2021
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The economic impact of government imposed regulations due to the COVID-19 virus was much the same in every corner of the state of Montana. There was far greater differences in economic activity between different areas of the state before COVID, than what appeared after.

All of the 2020 declines across the state were historically large, reported Patrick Barkey, Director of the Bureau of Business and Economic Research (BBER) at UM, during the Montana Economic Outlook virtual seminar.

“The small differences between cities largely stem from the relative size of the accommodations and food services in their local economies, which bore the brunt of COVID-related business declines,” according to Barkey in the Montana Business Quarterly.

Another factor that played a role in the differences was the degree to which government jobs sustain a community’s economy. Few if any government jobs, at any level of government, were suspended during the shutdowns on business and associated jobs in the private sector. So, for example, for that reason, Helena in Lewis & Clark County would fare better.

But Lewis & Clark County was not recession proof during the COVID downturn, according to Barkey. “The shutdown in schools helped produce the opposite – a disproportionate contraction in government employment and wages that produced more pain than elsewhere. This was partially offset by strength in retail and stability in health care. But the largess of the CARES Act brought plenty of federal spending into Montana in general, which bodes well for Helena’s immediate future.”

Lewis & Clark is among urbanized counties that most readily align with the average of the state’s economic performance. Other counties include Cascade, and Silver Bow.

The education, information and media sectors of Cascade County were more impacted by the economic restraints of the pandemic than most. The county’s retail sector, which serves a “large swath of north central Montana” held up better. The county, which is home to some of the most productive farmland in the state, can probably expect a better year for farm revenues, “thanks in part to government support programs.”

Because Silver Bow County has risen in prominence as a tourist destination in recent years, its economy was particularly impacted by the COVID crisis. Although, Silver Bow’s economy has been somewhat volatile in recent years, “Its earnings overall have always been greatly influenced by the wages and bonuses paid by its remaining mining employers, and the recent strength in copper prices augers well for the immediate future for that sector.”

The “high-flying county” of the state has been Gallatin County “for the better part of two decades, excepting the real estate collapse … during the Great Recession”.  Gallatin County has had the strongest rebound in the state, according to Barkey, who pointed to a 50 percent recovery of its passenger air traffic as an indicator.  As indicated by non-farm earnings, Gallatin County “has averaged annual growth of 6.3% since 2013. Only Madison County has  topped that growth in the same period. The Bozeman area’s economic strength comes from its university, access to Big Sky Ski area, and Yellowstone National Park. In recent years, it has received a boost from high-tech, professional services and manufacturing growth.

Yellowstone County is among the counties that have economic performances above the statewide average. Although the largest, and previously the state’s fastest growing economy, Yellowstone County “has tailed off of late.”

Prior to the oil price collapse of 2014-15, Billings enjoyed strong growth that reflected the economic conditions of the four-state region, for which it serves as a commercial hub. Both of its economic engines, energy and agriculture enjoyed very good years in the aftermath of the Great Recession.

“As a county with no oil reserves, Yellowstone’s connection to Bakken oil fields and other energy and mining activities is less apparent, but its numerous, high paying, mining, construction and other support services jobs have had a huge influence on the overall fortunes of the local economy. The Bakken’s thankfully brief, but severe, downturn in the months after the oil price turbulence of early 2020 creates more uncertainty for this part of the economy. The strength of the goods side of the national economy in the midst of this downturn and the emphasis on supply and logistics plays to the strengths of the Billings economy. As pandemic disruptions ease, the region’s health care industry, by far the state’s largest, should get back on track as well,” reported Barkey.

Overall growth in Flathead County has averaged 3.8% since 2013, second best of the state’s largest urban areas. Spending by nonresident visitors eclipsed wood products manufacturing in importance as an economic driver several years ago, although the latter’s presence remains significant, particularly in Columbia Falls. Flathead County also represents a key node in the state’s manufacturing landscape. The pandemic-related closure of the Canadian border immediately to the north has been an extra challenge for the economy in 2020.

Although hampered by enrollment declines at the University of Montana, Missoula County will likely be buoyed by growth in university research and growth in high-tech and professional services. It’s had an average growth of 3.6 percent since 2013.

The County’s recent growth history has suffered due in part to a decline in enrollment at the University of Montana, and the impact of the Great Recession. But, both Missoula and Ravalli Counties have experienced improvement since then. Missoula County lost its claim as the second largest to Bozeman, but, said Barkey, “… that says more about the growth in the latter than weakness in Missoula.”

About less populated areas of the state, Barkey said, “The oil patch counties … can expect to feel further fallout from the uneven performance of that commodity over the course of 2020, just as the coal producing areas bordering Wyoming have been challenged by the gloomier prospects for that economic driver.”

Other areas, especially along the northern border, have been helped by growth in government jobs and wages that occurred in 2020.  The out-migration of younger people toward cities remains a challenge to nonurban Montana.

Family Fights on After 30 Years in Bureaucratic Purgatory

3 February 2021
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How long should an American have to wait for the wheels of justice to turn – 5 years? 20 years? 30 years? – for the federal government to definitively rule on a routine mining patent request that could make or break the success of a family-owned business?  

And what recourse does that business owner have if the government, rather than approve or disapprove a request, just sits, and sits, and sits on it, leaving the applicant forever trapped in bureaucratic purgatory?   

That was the situation facing Monte Ray and his family in 1999, when they were forced to shutter a successful Mojave Desert cinder mine they had operated since his father Emerson staked the claim in  the 1940’s because the Department of Interior refused to decide, yay or nay, on a patent mining application the Rays made with the Bureau of Land Management in 1991. Instead of providing materials to help supply the Las Vegas housing boom, the Rays’ mine overnight became another California ghost town, which it remains to this day.   

Mountain States Legal Foundation last year made headway in breaking the logjam when a 2019 petition for a writ of mandamus it filed forced the Department of Interior to act on the application, resulting in a partial win for the Rays. The Rays were given a patent on only 10 acres of the original 692.5 acres they sought, but the Ray’s right to a patent was now established, laying the predicate for further legal action.   

This week’s MSLF filing challenges Interior’s stingy drawing of mine boundaries, arguing that the agency’s misrepresentation of the law and complete failure to consider basic facts vital to an accurate understanding of the situation rendered its long-delayed decision arbitrary and capricious in violation of the Administrative Procedure Act. MSLF wants the agency to go back to the drawing board and come back with a more carefully considered decision on the patent application, in light of the facts it ignored the first go-around. That’s the least the Rays are owed after the prolonged indifference and disdain the government showed towards the Rays, according to MSLF’s lead attorney on the case.  

“The Rays waited for nearly three decades to get an answer from the BLM on their patent application, and now that we’ve finally forced the government to respond, it gave them a slap in the face,” said MSLF Attorney David A. McDonald. “By filing this complaint, we’re making a statement that not even the federal government can get away with treating people this way.” 

Monte Ray’s niece, Robin Ray, slammed the government’s mistreatment of her family as unjust and disgraceful. “Government tyranny has many faces; sometimes it comes in the form of a flagrant disregarding of an American family’s request to continue its family business,” Ray said in response to the latest filing, “Just ignore them and they will go away, is what they planned. But we didn’t go away. Is this any way for the American government to treat its hard-working citizens?” 

Boots on the Hill – Ag Scrutinizes Bills

3 February 2021
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By Nicole Rolf and Rachel Cone, Montana Farm Bureau

With more than 3,000 bill draft requests filed, just a few over 300 have been introduced in the 2021 Montana Legislature so far. This means much of our time now is spent analyzing, researching, and talking to sponsors and agencies here in Helena to better understand the intent and ramifications of potential bills before they’re heard in committee. We work proactively to suggest improvements, ask for changes, and help ensure that when and if a bill is introduced, it will be positive for Montana’s agriculture industry.

We continue to get to know our state’s new administration. This week, we met with a number of Governor Greg Gianforte’s key staff members, including policy advisors Glenn Oppel and Michael Freeman and attorney Rachel Meredith. We appreciate that Gianforte’s team reached out to us for this meeting, seeking input from Montana’s agriculture organizations on the issues that matter most to our state’s No. 1 industry.

Our conversation covered an array of important topics that impact our state’s farmers and ranchers, including exempt wells, wild bison, meat processing capacity and the state’s new veterinary diagnostic lab. These executive staff members were helpful and informative. They made it clear that this administration will support private property rights, the growth of value-added agriculture in our state, and the proposal put forward by the Department of Livestock to build a new Veterinary Diagnostic Lab. This is good news for farmers, ranchers, and the population at large.

The Montana Veterinary Diagnostic Laboratory provides disease diagnostic support to veterinarians, livestock producers, companion animal owners, and the Department of Fish, Wildlife & Parks, as well as many other state and federal agencies. The laboratory supports the Department of Livestock’s Animal Health Division and Milk & Egg Bureau, includes the State Central Milk Laboratory and helps protect public health by testing for zoonotic diseases.

It’s clear we need a new lab to provide the services that livestock producers and the public in general needs to ensure a safe, wholesome food supply and healthy human and animal populations. The Department of Livestock has worked hard to develop a funding proposal that is equal parts privately funded by rancher and farmer per capita fees and publicly funded with General Funds appropriations.

Funding for the new Diagnostic Lab is included in House Bill 14, which is currently working its way through the Joint Appropriations Subcommittee on Long-Range Planning. HB 14 also includes funding for a new wool lab and our state’s agriculture experiment stations, which Montana Farm Bureau members also support. We’ll share more updates throughout the session as this appropriations bill makes it way to the final budget. 

While there is a bevy of bills on our radar, we have testified on 14 that Montana Farm Bureau members have specific policy directive on. Here are two of the many we testified on this week:

Senate Bill 55: Revise the Process for Water Right Ownership Updates, sponsored by Sen. Jill Cohenour (D), SD 42, hearing in Senate Natural Resources Committee.

The Water Policy Interim Committee was busy in the time leading up to this legislative session, and this bill is the result of that work. First, some background: This is a joint, bi-partisan committee that studies water quality and quantity issues between sessions and provides suggested legislation to the committees. It’s often referred to by its acronym, WPIC, which sounds a lot like “Whippic” when pronounced to those not as familiar with legislative lingo. 

Senate Bill 55 amends the process for water right ownership updates and creates a certification process to resolve ownership disputes. If passed, this legislation would more precisely require the Department of Natural Resources and Conservation to update its records of water right ownership within 30 days of receiving notification regarding a change in water right holdings. It is the personal responsibility of a property buyer and seller to file the proper paperwork concerning a transfer of water rights, and this legislation requires the DNRC to keep those records up to date and accurate, which is an obvious necessity.  

House Bill 142: Generally Revise Hemp Laws, sponsored by Rep. Joshua Kassmier (R), HD 27.

Montana is one of the nation’s largest hemp producing states. Hemp growers in Montana currently operate under the guidance of a pilot program launched in the state in 2014. Hemp is a highly regulated product in a quickly evolving market. It’s a crop that many farmers in Montana have been excited to add to their cropping rotations.

This bill generally revises current Montana hemp laws to comply with federal hemp laws, and it allows the Montana Department of Agriculture the rule making authority it needs to adhere to ever-evolving federal laws or regulations. This bill allows our Department of Agriculture to keep our state’s hemp program current so that our farmers can be assured they are complying with a consistent set of state and federal guidelines, ensuring the long-term success of the program.

Unmatched Resolve: Reflections on a 56-County Road Trip

22 January 2021
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By Brent Donnelly

As director for the U.S. Small Business Administration (SBA) Montana District, I have the unique opportunity to work with entrepreneurs and small business owners across Montana to help provide capital and connections that support growth for our state’s businesses. This year has kept my team busy as we’ve worked with local lenders to secure forgivable loans for 24,000 small business owners through the Paycheck Protection Program (PPP) and other SBA lending programs designed to help keep businesses afloat during the extreme challenges we’ve faced.

 Earlier this month, I approached my team and told them that I wanted to end the year on a positive note – doing something awesome to encourage small business owners while also challenging Montanans to shop local. Through this, we created the Peaks to Plains Business Resiliency Tour, a 3,400-mile road trip that took us to small businesses in all 56 Montana counties within seven days. This journey allowed us to hear incredible stories of grit, ingenuity, and community commitment from business owners in every county of the state.

 In one county, a business owner told us how members of their community came in to buy gift certificates, only to rip them up – they just wanted to do their part to ensure the store would get through the pandemic. A floral boutique told us how they had put in a sizeable flower order before the local prom was cancelled. With the significant revenue-generating event no longer existent, the flower shop encouraged local residents to buy a flower and give it to someone as a random act of kindness. Within hours, the flowers were sold out. A clothing store set up a “blessing board” that allowed shoppers to provide discounts to certain groups of people like healthcare workers, first responders, pastors, and teachers. More businesses than ever took to social media to promote their goods and services, and restaurants pivoted business models in order to safely provide food services for their hometowns. Local lenders went above and beyond to assist businesses with lending programs and the financial complexities imposed by the pandemic. This year has truly demonstrated how Montanans come together during challenging times. Neighbors help neighbors. Communities support their own. 

 While nearly every business told us of the incredible ways their community sustained them, we heard stories of struggle and tragedy, too. We were moved as the owner of a rural coffee shop told us how the coronavirus took the life of her mom and business partner this year despite the implementation of aggressive health precautions. As we listened to her story, we watched customers come the shop and break into tears as they embraced the owner and told her how much her mom and their business meant to the town.

These stories – and dozens of others – demonstrate the essential qualities of this sector, because in Montana, small businesses ARE our communities. Statewide, 99.3 percent of businesses are classified as “small businesses,” and that pool employs more than 65 percent of our state’s workforce. To put it simply, in order for Montana to succeed, small businesses must succeed.

 The SBA has played a pivotal role in supporting small businesses this year amidst the pandemic, but no amount of aid compares to customers in stores or families in restaurants. Many locally owned retailers earn roughly 50 percent of annual revenues during the period between Thanksgiving and Christmas, so it’s critical that people continue to shop and eat local in the coming weeks.

 Soon we’ll welcome in a new year where we’ll share more of the incredible stories we heard in the last few weeks. While it’s impossible to predict what 2021 holds, I’m confident that Montana small businesses will sustain the unmatched resolve that has carried them through this year. I’m hopeful people will continue shopping and dining locally. And I, along with Kelly, Rena, Tom, Martin, and Andy in the SBA Montana District, remain absolutely committed to working with unyielding intensity to deliver support and resources to Montana entrepreneurs.

Brent Donnelly is the Small Business Administration District Director for Montana.

Second Round Open of Paycheck Protection Program

22 January 2021
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The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, has  re-opened the Paycheck Protection Program (PPP) for new borrowers and certain existing PPP borrowers. To promote access to capital in underserved communities, only community financial institutions could initially make PPP Loans starting on January 11.  The PPP is now open to all participating lenders.

This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.

“The PPP was an incredible shot in the arm for small businesses last year, and this second wave of financial support will especially be a boost to businesses in rural and underserved communities,” said Dan Nordberg, SBA’s National Director of Rural Affairs and Region VIII Administrator. “With a targeted opening, SBA is prioritizing and extending relief to impacted business owners who need it the most. If you own or operate a small business, I strongly encourage you to look into this opportunity for assistance. As always, our SBA team is eager to answer questions, offer help through the process, and connect business owners and entrepreneurs with tools for long-term health and success.”

Key PPP updates include:

*   PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;

*   PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;

*   The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;

*   The PPP provides greater flexibility for seasonal employees;

*   Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and

*   Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

*   Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;

*   Has no more than 300 employees; and

*   Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Red Tape Under Attack

22 January 2021
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Signing his first executive order, Governor Greg Gianforte established the Red Tape Relief Task Force.

 Governor Gianforte, who campaigned on the promise of conducting a top-to-bottom regulatory review of all state agencies, will rely on the task force to identify excessive, outdated, and unnecessary regulations. Lieutenant Governor Kristen Juras will lead the task force.

Montana small businesses are saddled with over 60,000 regulations.

“The message from Montana small business owners, farmers, and ranchers has been loud and clear: unnecessary red tape is out of control, and they need help. Today we’re taking our first steps to provide them with much needed red tape relief, and I’m grateful to Lieutenant Governor Juras for leading the charge,” said Gianforte said after signing the executive order.

The Red Tape Relief Task Force will present its report and proposals to the governor by August 1, 2021.

New State Budget Proposed by Governor

22 January 2021
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Last week, Governor Greg Gianforte released his proposed budget for state government for the 2023 biennium.

The plan would fulfill many of the policy priorities he outlined in his “Montana Comeback Plan” with the priorities of getting the economy going again, safely opening businesses, and getting Montanans back to work.

The budget provides $50 million in broad-based and targeted tax relief, including cutting the top marginal income tax rate to 6.75%. In 2019, Montanans who earned a taxable income of more than $18,400 paid the top marginal rate of 6.9%.

“This roadmap to the Montana comeback will help unlock our state’s full, outstanding potential,” Gianforte said.

He highlighted efforts to control state spending, saying, “I promised we would hold the line on new general fund spending. This budget does. After a decade of out-of-control spending, this budget brings fiscal responsibility back to state government while providing essential services.”

The governor’s budget also relieves 4,000 small businesses from the burden of the business equipment tax by raising the exemption from $100,000 to $200,000. The business equipment tax is a unique Montana tax that requires businesses to pay taxes on equipment, supplies and tools used in the production and operation of the business.

Gianforte’s budget boosts funding by 25 percent for programs providing property tax relief to low-income homeowners, including disabled veterans and seniors.

To combat the drug epidemic, the Gianforte budget devotes marijuana tax revenue and part of the tobacco tax settlement to the HEART Fund, or the Healing and Ending Addiction through Recovery and Treatment Fund. It will fund a full continuum of substance abuse prevention and treatment programs for communities. With $7 million in new fund and a federal match, the governor’s budget invests an additional $23.5 million per year in substance abuse prevention and treatment programs.

The governor proposes a $1 million investment in trades education by providing a credit for employee education and training.

Gianforte’s budget also provides $2.5 million of incentives to raise the pay of Montana’s starting teachers. Montana ranks last in the country in starting teacher pay.

Gianforte noted that, even with statutory required spending and investments in combating the drug epidemic, increasing starting teacher pay, and expanding trades education, total general fund spending increases less than one percent per year.

Government Funded Broadband?

22 January 2021
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By Johnny Kampis, The Center Square

President-elect Joe Biden’s broadband plan indicates he will push for more government-owned (taxpayer-funded) internet networks, which would be bad news for taxpayers.

[The issue will be taken up by the Montana State Legislature.]

Biden’s agenda, released on his website during his presidential campaign, talks in detail about his broadband goals. That includes expanding broadband to every American, which could include wireless broadband through the deployment of 5G.

The most alarming part of the plan: Biden says he will task the U.S. National Telecommunications and Information Administration (NTIA) and the U.S. Department of Agriculture (USDA) “to support cities and towns that want to build municipally-owned broadband networks.” This means that taxpayers will be on the hook for these systems.

A Democratic task force put together by Biden and Sen. Bernie Sanders (I-Vt.) wants to empower the Federal Communications Commission (FCC) to largely undo much of what was accomplished by Chairman Ajit Pai under the Trump administration, including reversing the agency’s stance on government broadband.

“Democrats will take action to prevent states from blocking municipalities and rural co-ops from building publicly-owned broadband networks, and increase federal support for municipal broadband,” the recommendations released by that task force this summer state.

But the list of such projects that were tried and failed are quite long. The Taxpayers Protection Alliance highlighted many of them in its May report “GON with the Wind: The Failed Promise of Government Owned Networks Across America.” More follies are noted on TPA’s “Broadband Boondoggles.”

Jeffrey Westling, a fellow in innovation and technology policy at R Street Institute, told TPA that government can help usher in infrastructure growth in other ways, such as loosening regulations and offering incentives to private providers to aid expansion to high-cost areas such as rural America. That’s a better plan than promoting municipal broadband, he said.

“There’s a better way of doing this that doesn’t put taxpayers at risk,” Westling said.

U.S. Telecom: The Broadband Association agrees with Westling. In its agenda for the next administration’s first 100 days, the organization lays out its wish list for the goal of connecting every American with broadband.

This includes addressing “antiquated policies” that harm broadband deployment and discourage competition. U.S. Telecom said the administration can work to eliminate high pole attachment rates, help expedite permitting processes and lift mandates that companies must sustain outdated networks rather than devote more resources to deploying the next generation of networks.

U.S. Telecom also said Congress should fund the Broadband Data Act so the FCC can create better broadband maps to ensure taxpayer resources are better targeted toward unserved and underserved areas. The group also rejects any proposal that would treat broadband as a government utility and the potential red tape that could ensue.

“All policies should be viewed with an eye toward removing barriers that impede getting broadband to everyone,” the U.S. Telecom agenda states.

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Editor’s Note: Will government controlled broadband be less prone to censorship and communication  barriers than is the current monoply status that government has granted to the big tech companies in the US?

FDA Wants to Tax Businesses that Raced to Produce Hand Sanitizers

22 January 2021
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Believe it or not, the federal Food and Drug Administration (FDA) on Dec. 29 announced that it was going to impose new fees on distilleries and other facilities that rushed to the rescue of a COVID –stricken nation by producing hand sanitizers. The FDA backed off the proposed tax only when the Department of Health & Human Services (HHS) told them to.

HHS explained that only the FDA has the authority to issue such rules. While HHS administration said that the industry should be thanked rather than taxed, it chastised FDA primarily for having failed to go through the proper regulatory processes. The incident is a reminder about the true nature of government and regulatory controls.

Brian Harrison, HHS Chief of Staff, issued a statement that they have withdrawn the Notice published in the Federal Register,  OTC Monograph Drug Facility Fees and directed FDA to cease enforcement of these fees. 

Early in the COVID-19 crisis many small businesses across the country joined the fight to combat the virus which included distilleries that augmented their operations to produce hand sanitizer, an important asset in the battle to deter the spread of COVID.

In March, the FDA issued a guidance document – the Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19) – which provides flexibility for those entities capable of producing hand sanitizer to rapidly enter the market.