Big Sky Economic Development (BSED) will receive a $12,000 U.S. Bank Foundation Community Possible grant to be directed toward financial education for small businesses and workforce development initiatives.

The U.S. Bank Foundation is committed to making Community Possible through the areas of Work, Home and Play to create lasting change. The foundation does this by focusing on meaningful impact in the communities it serves and through meaningful partnerships with local nonprofits, like Big Sky Economic Development.

Bill Davies, U.S. Bank Regional President, said “We know that a strong small business environment and an educated workforce ensures the prosperity of our communities. We provide grant support to programs and organizations that help small businesses thrive, allow people to succeed in the workforce, provide pathways to higher education and gain greater financial literacy. Big Sky Economic Development is a tremendous advocate for small business and workforce development, and we can’t think of a better partner to help us fulfill this work.”

“This grant will allow us to continue our mission of helping small businesses start and grow in our region and allow us to continue to offer key programs related to workforce development,” said Steve Arveschoug, Executive Director for BSED.

The City of Billings hopes to be able to issue a request for bids for the Inner Belt Loop a year from now.

The City of Billings Planning Department released an update last week on the progress of the Inner Belt Loop as it relates to the federal Build Grant, which the city won to help fund the project.

City staff is in the process of meeting all the requirements outlined in the grant in order to enter into an agreement with the Federal Highways (FHWA) department. The agreement cannot be submitted until the construction documents are ready, which means the completion the right-of-way purchase, environmental documents and final construction documents. Staff expects to be able to submit all that information by fall, with another six months required for the FHWA review, putting an executed agreement into April 2022. 

Once the city receives the executed agreement from FHWA, the project will be put out for bid.

Billings was awarded $11.6 million in federal BUILD grant funds to construct the Inner Belt Loop and Skyline Trail in September 2020. The grant award was for only a portion of the requested sum of approximately $16.8 million to complete the Inner Belt Loop, and the pedestrian/bike trails, Skyline and Stagecoach. The City of Billings is supplementing the project with $7 million and $85,000 is being donated from Billings TrailNet.

City planning expected to receive six appraisals for right-of-way procurement at the end of April.

The city has also been in negotiation with an environmental professional who has completed the NEPA environmental process for other recent TIGER and BUILD grants, and believe that his services will cost less than $50,000 to do similar work for Billings. 

They anticipate completing the environmental scoping and contracting also by the end of April, with the environmental (NEPA) work completed within about 6 months.  The consultant will work to prepare the field review and reports, submittals by the consultant to various agencies, and review by agencies for approval.

A date will be announced for the official kick-off event of the project.

A new report released by EY finds that repealing the step-up in basis tax provision would damage the gross domestic product (GDP) and significantly decrease job creation. The study was conducted for the Family Business Estate Tax Coalition, which includes almost 60 organizations representing family-owned businesses.  

The EY study found middle-class, family-owned businesses would be particularly hard hit by the repeal. Currently, when someone inherits assets, they aren’t taxed on the appreciation that happened before they inherited them. If family-owned farms, small businesses or manufacturers are forced to pay capital gains accrued by the prior owner, they would likely face large tax bills that put the future of their business at risk.   

According to the study’s findings, repealing the step-up in basis would result in:  

* 80,000 fewer jobs in each of the first ten years;  

* 100,000 fewer jobs each year thereafter; and

* A $32 reduction in workers’ wages  for every $100 raised by taxing capital gains at death. 

It would also reduce GDP relative to the U.S. economy in 2021, by approximately: 

* $10 billion annually;

* $100 billion over 10 years. 

“Repealing stepped-up basis is not a free lunch for those looking to generate tax revenue and would have significant consequences in the multifamily marketplace,” said Doug Bibby, President of the National Multifamily Housing Council. 

A program especially designed for the restaurant industry has been announced by the US Small Business Administration. The program was part of the federal government’s American Rescue Plan. It set aside $28.6 billion for a Restaurant Revitalization Fund (RRF)to be administered within the SBA.

Said SBA Administrator Isabella Casillas Guzman, “The restaurant industry has been among the hardest-hit sectors during the economic downturn caused by the COVID-19 pandemic. To help bring jobs back and revive the industry… the SBA will administer the funds to the hardest-hit small restaurants.”  For the first 21 days priority will be given to applications from small businesses owned by women, veterans and disadvantaged individuals.

“With the launch of the Restaurant Revitalization Fund, we’re prioritizing funding to the hardest-hit small businesses – irreplaceable gathering places in our neighborhoods and communities that need a lifeline now to get back on their feet,” said Guzman. “… we’re rolling out this program to make sure that these businesses can meet payroll, purchase supplies, and get what they need in place to transition to today’s … marketplace.”

Guzman emphasized, “We’re also focused on ensuring that the RRF program’s application process is streamlined and free of burdensome, bureaucratic hurdles – while still maintaining robust oversight. Under my leadership, the SBA aims to be as entrepreneurial as the entrepreneurs we serve – and that means meeting every small business where they are, and giving them the support they need to recover, rebuild and thrive.”

Governor Greg Gianforte has announced a settlement agreement that ends litigation between the Montana Department of Fish, Wildlife & Parks (FWP) and United Property Owners of Montana (UPOM).

“Under the previous administration, FWP didn’t do right by farmers, ranchers, and private property owners. In its effort to spread bison across parts of Montana, FWP didn’t do enough to account for the impacts to local communities and relied on outdated data,” Gov. Gianforte said. “This settlement agreement protects our livestock producers and rural lands and reaffirms the state can and should do better going forward.”

“FWP is committed to engaging communities and stakeholders on the impacts of decisions like this. We’re grateful to have this lawsuit behind us,” said Hank Worsech, director of FWP.

In January 2020, FWP issued a Final Programmatic Environmental Impact Statement for Bison Conservation and Management in Montana (EIS) and an associated Record of Decision. In March 2020, UPOM filed suit against FWP alleging the agency violated MEPA, MAPA, and environmental impact review requirements during the EIS process.

In the settlement agreement, FWP and UPOM agree the Final EIS failed to adequately consider disease transmission between bison, livestock, and other wildlife, there was an inadequate public comment opportunity, and the Final EIS relied on outdated data, among other things.

“This is a huge win for property owners in Montana.  We’ve successfully blocked the introduction of free-roaming bison for at least the next decade,” said UPOM Policy Director Chuck Denowh.  “This is a major setback for the American Prairie Reserve and their plan to impose wild bison on their neighbors and on our public land.”

Through discovery related to the lawsuit, Denowh says that UPOM learned that FWP officials were in active negotiations with the American Prairie Reserve to establish a free-roaming bison herd in Central Montana.  Documents obtained by UPOM indicated urgency to strike a deal prior to the end of Governor Bullock’s term. “If we hadn’t sued FWP over this bison plan there’s little doubt we would have a herd of free-roaming bison in Central Montana today.” said Denowh.  “It’s chilling to think that FWP was engaging in secret negotiations with an out-of-state special interest group to impose free-roaming bison over the strong objections of local stakeholders.”

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..

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 

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.

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%.

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.