FEMA announced that federal disaster assistance has been made available to the state of Montana to supplement recovery efforts in the areas affected by flooding April 10-26, 2023.

Public assistance federal funding is available to the state, tribal and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by flooding in Blaine, Daniels, Hill, Park, Roosevelt, Sheridan and Valley counties and the Fort Peck Tribes.          

Federal funding is also available on a cost-sharing basis for hazard mitigation measures statewide.

Jon K. Huss has been named Federal Coordinating Officer for federal recovery operations in the affected areas. Additional designations may be made at a later date if requested by the state and warranted by the results of further assessments

By Greg Cappis, MSU News Service

Alicia Crane wasn’t sure how she was going to be able to afford her doctor of nursing practice degree.

As an undergraduate at Montana State University, she had always hoped to earn an advanced degree so she could better serve her rural community, but she knew that raising three children while working as a registered nurse would make paying for another three or four years of school difficult.

Then she applied for MSU’s Advanced Nursing Education Workforce program scholarship. As one of 20 ANEW scholars selected annually, Crane receives a stipend each semester to help cover the costs of tuition, books and travel as she prepares for a career as a nurse practitioner working in a rural community.

“It’s been a huge blessing and help,” Crane said. “I can’t say in words how thankful I am for the scholarship.”

The ANEW program is funded by a grant from the Health Resources and Services Administration, a division of the U.S. Department of Health and Human Services. MSU received its first ANEW grant in 2019, and it was recently renewed for $2.6 million over four years, which administrators in the Mark and Robyn Jones College of Nursing refer to as ANEW 2.0.

“The ANEW grant allows us to provide the financial support to cover tuition and fees, books and supplies, and even travel,” said Sarah Shannon, dean of MSU’s nursing college. “ANEW also allows us to offer special learning opportunities to ensure that we produce not just nurse practitioners but rural-ready nurse practitioners who are already embedded in and committed to their local communities.”

The ANEW program is designed to increase access to health care for rural Montanans, a core focus of the nursing college. All but two of Montana’s 56 counties are classified as health care professional shortage areas, according to the state’s Department of Health and Human Services.

MSU offers two options in its doctor of nursing practice, or DNP, degree program. Family practice nurse practitioners serve as primary care providers with the ability, in Montana, to diagnose, prescribe and refer patients to specialists. Psychiatric mental health nurse practitioners assess, diagnose and treat acute and chronic mental health needs of their patients.

ANEW scholarship recipients commit to working in rural health care. Scholars are required to perform some of their clinical work at rural hospitals or health centers. They also must join the Area Health Education Center scholars program, a two-year, nationally recognized certificate program designed to develop and improve skills to help them better serve patients in rural communities. The AHEC scholars program includes 80 extra hours of learning and access to specialty training seminars, like classes on suturing or managing diabetes in a rural setting.

Economic indicators seem to indicate that the US economy is treading water with some indicators up and others down .

American consumers continue to spend what they don’t have.

Credit card indebtedness reached a record $1.03 trillion in the second quarter of 2023, according to the New York Federal Reserve Bank. Total household debt exceeds $17 trillion, with 72.4% of that coming from mortgages and home equity lines of credit.

The Index of Consumer Sentiment ticked down from 71.6 in July  to 71.2 in August. The July reading was the best reading since October 2021. But Americans remain anxious about the economy overall.

The Small Business Optimism Index increased from 91.0 in June to 91.9 in July, the highest reading since November. Despite the uptick in sentiment, small business owners remain concerned about the economy, with the uncertainty index rising to a 25-month high. The top “single most important problem” was the difficulty in finding enough qualified labor (23%), followed closely by inflation (21%). Despite this, fewer NFIB business members plan to increase prices over the next three months… falling to the lowest rate since December 2020.

Consumer prices rose 0.2% in July for the second straight month, with 3.2% growth over the past 12 months. Excluding food and energy, core consumer inflation has increased 4.7% since July 2022, the weakest reading since October 2021.

Yet, core inflation remained stubbornly high.

Producer prices for final demand goods and services rose 0.3% in July, the strongest gain since January but driven largely by higher costs for services.

Overall, inflation continued to moderate, but even so the Federal Reserve is predicted to keep interest relatively high. They are not being predicted to make any changes in interest rates at their next meeting in September.

By Brett Rowland,The Center Square

The U.S. Postal Service reported a $1.7 billion loss in the third quarter adding to ongoing losses for the once self-sufficient agency. 

The U.S. Postal Service, an independent federal establishment that is mandated to be self-financing, said the third quarter losses were “almost exclusively to the non-cash impact of the Postal Service Reform Act in April 2022.” The act removed the Postal Service’s obligation to pre-fund retiree health benefits and eliminated all previously imposed pre-funding requirements that remained unpaid, among other changes. The law was intended to improve the Postal Service’s financial sustainability. 

“Continued rising costs in several areas of our business pose a challenge,” Chief Financial Officer Joseph Corbett said in a statement. “We continue to manage the costs within our control, such as by reducing work hours by 6 million hours compared to the same quarter last year and by focusing on transportation and other operating costs.”

Postmaster General Louis DeJoy said the Postal Service continues to face inflation and other pressures.

“Our team is working hard to reduce our cost of performance which is helping to offset still sizeable inflationary and economic pressures,” he said in a statement. “We are setting the stage for long-term financial sustainability as we continue to modernize our processing, transportation, retail and delivery networks.”

Congress designed the U.S. Postal Service to be self-sustaining, but in fiscal year 2007, expenses overtook revenue. This has led to losses of $87 billion through 2020. The agency is further saddled with $188 billion in unfunded liabilities and debt, according to a 2021 report from the U.S. Government Accountability Office.

The U.S. Postal Service is the largest postal service in the world, delivering an estimated 49% of all mail sent globally. 

A serious crime in the Biden Administration is the sale of incandescent light bulbs, the sale of which is now illegal.

The Biden administration has enacted a regulation that places retailer or online seller offering incandescent light bulbs for sale subject to severe punishment under the full enforcement of the federal government.

The crackdown on Thomas Edison’s familiar light bulb has been in the works for a long time. It started with provisions tucked into the big 2007 energy bill signed into law by then-President George Bush. These provisions created energy efficiency standards for residential lighting that incandescent bulbs would have great difficulty achieving.  The regulations were designed to get progressively more stringent in the ensuing years.

At the time, many environmental activists and some advantage-seeking light bulb manufacturers were aggressively pushing compact fluorescent lamps (CFL) as the green alternative. But those twisty CFL bulbs, with their high price and harsh glare, proved very unpopular with consumers – a backlash not unlike the one seen early this year after a Biden administration official suggested banning gas stoves.  Nonetheless the Obama administration Department of Energy (DOE), in its waning days in January 2017, finalized rules accelerating the demise of incandescent bulbs.

By Manish Bhatt, Tax Foundation

(Editor’s Note: The Tax Foundation recently published a report on Montana’s new tax changes, explaining them and evaluating their potential effectiveness.)

Montana is renowned for its vast natural beauty and outdoor recreation, but the state also boasts a competitive tax climate, ranking fifth in our 2023 State Business Tax Climate Index. Like many other states, its coffers are overflowing, and lawmakers have rightly prioritized tax reform to share the strong revenue position with those calling the Treasure State home. Legislators should build on these efforts and provide sustainable and sound property tax relief.

Short- and Long-Term Tax Reforms

In 2023, Montanans will be eligible for tax refunds and rebates on income and property taxes.  Generally, one-time, or short-term, tax relief options are not efficient or effective and can exacerbate the negative effects of inflation. However, these measures were paired with long-term, pro-growth tax reforms that could boost the competitiveness of the state overall.

Montana’s seven individual income tax brackets will be consolidated into two in 2024. Previously, the top rate was set to drop to 6.5 percent (down from 6.75 percent), but Senate Bill 121 will reduce it further to 5.9 percent. The bill also raises the state Earned Income Tax Credit to 10 percent of the federal credit. House Bill 221 creates two rates (depending on income and filing status) for taxing capital gains—4.1 percent and 3.0 percent—replacing a 30 percent net long-term capital gains deduction set to take effect in 2024.

Businesses in Montana will benefit from House Bill 212, which raises the business property tax exemption from $300,000 to $1,000,000; this will eliminate 78 percent of current taxpayers from the rolls at a cost of a mere $9 million a year, absorbed by the state. Additionally, Senate Bill 124 revises corporate income tax apportionment from three-factor (double-weighted sales factor) to single sales factor beginning in 2025.

Principled Property Tax Relief Is Needed

Overall, these reforms are commendable and other states should follow the example Montana has set. However, like elsewhere in the Mountain West, Montana property owners are facing rising property values and, in turn, are saddled with greater property tax burdens. Property tax collections don’t need to keep pace with soaring property values because the cost—and value—of government services isn’t dependent on those values. While inflation has increased the cost of government, there’s no reason why a community where property values have increased by, say, 40 percent should have to remit 40 percent more in property taxes from that same set of properties. Residents are not receiving 40 percent more or better government for their money.

Ballot Initiative 2, now before the Supreme Court after an attorney general’s determination that the initiative is legally insufficient, seeks to limit property taxes through several provisions, including: (1) establishing 2019 as the base for real property valuations, (2) instituting a valuation assessment limit of two percent unless the real property is newly constructed, significantly improved, or changed ownership, and (3) limiting the amount of ad valorem tax that may be assessed to one percent of the real property’s value.

Despite the good intentions, this proposal is not sound tax policy and could create detrimental market distortion. Assessment limits are problematic because they incentivize property owners to remain in their homes longer, as purchasing a new residence triggers a new assessment and, potentially, higher taxes. This often disproportionately impacts younger or lower-income purchasers as the supply of starter homes is reduced when more established, higher-income property owners forgo new purchases.

Moreover, assessment limits could result in similar properties in the same neighborhood having dramatically different property tax obligations depending on purchase date—benefitting those with longer tenures in their homes and, effectively, penalizing more recent purchasers (many of them younger homeowners). Appraisal caps also disincentivize new construction and major home improvements, both of which could result in the owner paying higher property taxes.

The ballot initiative applies to many classes of real property, including multifamily rental units, but it excludes business machinery and equipment. To be clear, including rental property in the relief is positive because the tax burden is less likely to shift from single-family homeowners to lessees in the form of higher rent, which could occur if the measure was less neutral. While the legislature has raised the exemption limits for business property, it will be important to ensure that such equipment is not disproportionately impacted by higher levies in the future to recoup lost revenue from other property classes.

Assessment limitations provide property tax relief for homeowners, but they come with real costs, distorting housing markets to the detriment of many of the homeowners—and would-be homeowners—the limits purport to help. Fortunately, Montanans and their lawmakers have options. They could consider levy limits, which restrict the growth of revenue collections from property taxes, rolling back millages across the board to limit the amount that a jurisdiction’s property tax collections can increase from rises in assessed value alone. This can help avoid the disparities that result from assessment limits, lowering rates for everyone when collections rise due to a spike in assessed values, rather than protecting some homeowners to the detriment of others. If states like New York and Massachusetts manage to get this right, surely Montana can too.

Policymakers could also pursue what some states call “compression,” which is when the state uses its own funds to buy down local property tax rates. Simply capping rates, however, is not effective and would not protect property owners from valuation surges or from other policies intended to raise collections. And compression itself may backfire unless paired with levy limits; without them, local governments could pocket the state transfers and later raise millages back to where they had been previously.

Absent a special session, the Montana legislature next convenes in 2025, meaning taxpayers may have to wait for relief that is sorely needed today. This creates a precarious situation and one in which hasty decision-making could leave the state dealing with long-term negative outcomes. Ballot Initiative 2, regardless of whether it goes before voters, has a flawed design that homeowners may come to rue, but it speaks to a real and legitimate concern over rapidly rising property taxes. Policymakers should pursue principled property tax reform that benefits all property owners without creating market distortions or unfairly shifting the tax burden.

Governor Greg Gianforte recently opposed a proposed resource management plan amendment offered by the Bureau of Land Management (BLM) that would restrict responsible coal production in Montana.

“Affordable power generated by coal keeps the lights on in Montana and fuels manufacturing across the country and world,” Gov. Gianforte said. “I’m urging the Biden administration to scrap its plan that would undermine coal production in eastern Montana, eliminate a source of funding for our public schools, and destabilize our energy grid.”

Last week, the governor submitted a letter to BLM Director Tracy Stone-Manning and other agency officials as part of the public comment process for BLM’s Miles City Draft Supplemental Environmental Impact Statement/Resource Management Plan Amendment.

The BLM is currently contemplating changes to its coal screening process that would nearly block all coal reserves in Montana from production.

Revenues from coal reserves on state trust lands fund schools and other public institutions in Montana.

By Brett Rowland, The Center Square

A congressional watchdog repeatedly warned lawmakers about national spending and debt levels before a second of the Big Three credit rating agencies dropped the United States government’s credit rating down a notch.

Fitch Ratings made the decision recently to downgrade the government’s credit rating from the highest level of AAA down one tier to AA+. Fitch pointed to the U.S. government’s high national debt and deficits and an “erosion of governance.”

“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” according to credit-rating agency. “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management. In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process. These factors, along with several economic shocks as well as tax cuts and new spending initiatives, have contributed to successive debt increases over the last decade. Additionally, there has been only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population.”

After the announcement from Fitch, Treasury Secretary Janet Yellen said the downgrade was “arbitrary and based on outdated data.” In 2011, S&P Rating dropped the U.S. government’s credit rating one notch. Moody’s is the only one of the Big Three that has kept the U.S. credit rating at the top level of AAA. 

But the federal government’s own agencies have repeatedly raised concerns about federal spending and debt.

In February, the U.S. Government Accountability Office’s audit of the federal government’s financial statements found it “continues to face an unsustainable long-term fiscal path.”

“The growing debt is a consequence of borrowing to finance increasingly large annual budget deficits,” according to the report. “GAO projects that spending for Social Security, federal health care programs, and all other federal program spending increases more than revenue, resulting in the primary deficit; and net interest spending, which primarily represents the federal government’s cost to service its debt, steadily increases over the next 30 years, further widening the total budget deficits.”

The International Monetary Fund listed the United States’ debt as a percentage of GDP at 106% in 2021. Countries with high debt-to-GDP figures in 2021 included Cyprus (142.82%), Italy (146.55%), Singapore (163.89%), Eritrea (176.25%), Sudan (181.97%), Greece (212.4%) and Japan (221.32%). 

Still in the philosophy that they should be able to control what kind of kitchen stove American citizens can use, The Department of Energy is maintaining a grip on gas cooktops regulation, although loosening them somewhat following loud public outcry.

Ostensibly in the name of energy-efficiency, DOE published efficiency requirements for gas stoves so stringent that they would have been impractical for most consumers. Following strong public push-back, the agency is slightly loosening the BTU limits after reviewing data submitted by a trade association and a utility company,

Much of the media denounced concerns from the public about the government banning gas stoves, calling them conspiracy theorists, but the agency did publish a notice calling for new regulations which would have limited BTU consumption to 1,204, down from a baseline of 1,775 British thermal units, or kBtu per year. The proposal is so impractical that for all purposes it outlaws the stoves.

More recently, in a notice of data availability published in the Federal Register, DOE floated less stringent efficiency requirements for gas stoves, increasing them slightly to a limit of 1,343 kBtu per year, down from a recalculated baseline of 1,900 kBtu per year.

The Association of Home Appliance Manufacturers and PG&E provided the DOE with data on cooktops with higher consumption rates, which the agency had not used in its initial efficiency testing.

According to POLITICO, “Other comments led DOE ‘to better understand’ what features consumers want in a gas stove, including multiple high input rate burners and continuous cast-iron grates.” 

Manufacturers would be required to spend more than $2.5 billion to comply with the originally proposed rules, according to the DOE’s own estimates, and consumers would save just 12.5 cents a month in energy costs.

The mandates would have been so strict as to make 96 percent of gas stoves on the market noncompliant.

In June the House passed the Save Our Gas Stoves Act, which would prevent the DOE from advancing its unworkable stove requirements.

The National Association of Manufacturers has held high-level discussions with policymakers on the importance of feasibility, affordability and consumer choice in rulemaking.

To that end, in June the NAM and members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations created the Manufacturers for Sensible Regulations, which aims to combat the recent regulatory onslaught by federal agencies.

“Manufacturers depend on regulatory clarity and certainty,” said NAM Managing Vice President of Policy Chris Netram. Throughout the year, the Department of Energy has proposed an unprecedented slew of regulations, and many were aimed at home appliances. The DOE is now taking steps toward a solution that is less likely to raise production costs significantly for manufacturers, and less likely to reduce the available features, performance and affordability for consumers.”

The Tax Foundation

The global tax deal is going mainstream. As Politico puts it, “the technical rules that were once solely the province of tax wonks in D.C. and Paris are being brought out into the public sphere.” Here’s what you need to know about it.

Developed by the Organization for Economic Co-operation and Development (OECD) and agreed to by more than 130 countries, the global tax deal would change where large multinational companies pay taxes (known as Pillar One) and create a global minimum tax (known as Pillar Two). It’s the latter making headlines.

Pillar Two would ensure that large multinational corporations pay an effective tax rate of at least 15 percent—an attempt to stop companies from moving their profits to tax havens (i.e., low-tax or no-tax jurisdictions).

Countries would have two options: they could change their domestic rules to comply with the global minimum tax or, if they don’t change their rules, other countries could tax their multinational companies to bring them up to 15 percent.

The Organization for Economic Co-operation and Development wants to level the international tax playing field.

This is the latest iteration of the OECD’s Base Erosion and Profit Shifting (BEPS) project, launched in 2013, to stop multinational corporations from gaming the international tax system. As a result of BEPS, dozens of countries (including the U.S.) tightened rules on multinationals. But the OECD believes these rules didn’t go far enough.

But the current approach wouldn’t level the playing field for two reasons.

First, the rules privilege some pre-existing policies over others. They treat refundable tax credits much more favorably than tax credits that are only available if a company has taxable income. Because many U.S. tax credits fall under the latter category, tailoring the U.S. system to the rules would cost over $100 billion.

Second, taking away one tool countries have to help businesses (taxes) doesn’t mean there aren’t others (subsidies). Countries that can spend more to support their businesses will have a leg up on countries that can’t.

Shifting income from one jurisdiction to another to reduce tax burdens is a real concern—one the U.S. acknowledged in 2017 by dramatically changing its tax rules for multinationals. The U.S. now has three minimum taxes all aimed at similar issues the OECD rules are attempting to address. However, none of the U.S. rules seem to qualify under the OECD standards.

The web of rules would be complex and there is much uncertainty, but it seems to be a losing situation for the U.S.

According to the best estimates, the U.S. Treasury is likely to lose revenue whether it adopts Pillar Two or not (if all other countries adopt the rules). Even if the U.S. complies, it is likely to lose $56.5 billion over 10 years. And if it doesn’t, that figure more than doubles to $122 billion.

The best way to avoid losing revenue is to ensure the U.S. continues to be a place where businesses want to invest and grow.

However, the global minimum tax would also undermine the U.S.’s attempts to encourage investment. For example, the federal government allows businesses to deduct research and development costs to spur innovation. But what happens if a multinational company uses that deduction and drops below the 15 percent threshold? Other countries could increase taxes on it, dampening Congress’s intended effect.

If the Treasury loses revenue to foreign governments, then taxes on domestic activity could rise to offset it.

Over the long term, if companies choose to avoid the U.S. when they’re deciding to invest, this could mean higher prices and less investment in innovation in the U.S., which means fewer of the cutting-edge products and services you enjoy and less money in your pocket.

Additionally, job opportunities and wages would likely decrease as businesses cut costs to make up for lost profits.