Author: Press Room

Chamber Welcomes Staff

19 January 2024
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The Billings Chamber of Commerce welcomes Abbie Chvilicek and Sara Hollenbeck to its staff.

Chvilicek fills the position of Member and Operations Specialist and Hollenbeck joins as the Marketing Specialist for Visit Southeast Montana, a tourism marketing arm managed by the Billings Chamber.

Chvilicek is a born and raised Billings, who graduated in 2022 after attending both Billings West High School and the Billings Career Center. Upon graduating, she attended massage therapy school and began practicing reiki. She has been working in customer service since 2019 which will serve her well as she embarks in her professional career with the Billings Chamber as the Member and Operations Specialist.

Hollenbeck grew up in California, obtained an Agricultural Business degree from Cal Poly, San Luis Obispo, and became a sheep rancher in Molt. She has immersed herself in the agriculture sector for over 15 years and combines this passion with marketing as the founder of High Five Meats and co-founder of Yellowstone Valley Food Hub. Hollenbeck brings her boundless love for Montana agriculture, the great outdoors, and the cherished traditions of the American West to the Visit Southeast Montana team.

Cost of Regs Exceed Cost of Taxes

17 January 2024
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A new report from the Competitive Enterprise Institute tallies the huge and growing cost federal regulations impose on American businesses and families – $1.939 trillion annually – and offers a set of reforms aimed at making our government more accountable.

“Rules made by federal agencies impose a cost of government that extends well beyond what Washington taxes,” said Wayne Crews, author of Ten Thousand Commandments: A Snapshot of the Federal Regulatory State. “Federal environmental, safety and health, social, and economic regulations grip the economy, making it needlessly harder and more expensive to run a household or business in this country.”

Exacerbating the problem is the more recent “whole of government” mandate initiated by the Biden administration that directs federal agencies to prioritize progressive political goals, like “equity” and climate change, unrelated to and on top of the agency mission set by Congress.

“Congress should start preparing now for substantial reforms to wrangle regulations back under control and put Congress back in charge,” said Crews.

The report urges the 118th Congress to begin now to lay the groundwork for specific reforms to:

* Vote on rules – Require congressional approval of significant or controversial agency rules before they become binding.

* Stop crisis policymaking – Pass an Abuse of Crisis Prevention Act to prevent abuse of “emergency” declarations.

* Cut the unnecessary – Identify which federal agencies or programs to eliminate or at least shrink their budgets.

* Exercise oversight – Launch hearings on the proper watchdog role of the White House Office of Information and Regulatory Affairs (OIRA) in reviewing the costs and benefits of proposed regulations;

* Require assessment – Prevent the current and future administrations from weakening a longtime requirement that the White House Office of Management and Budget assess the economic impact of new regulations;

* Require report cards – Require annual regulatory transparency report cards that help the public find out important information, like which agencies failed to track their costs-versus-benefits to society.

* Sunset rules – Pass legislation requiring an expiration date so rules don’t just exist in perpetuity for no reason.

* Empower a commission – Set up a regulatory reduction commission to identify unneeded regulations to eliminate.

* Automate rejection – Creating an “Office of No” tasked with making a case against new and existing regulations.

What is driving up the cost of drugs?

15 January 2024
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What is driving up the cost of drugs?

The common answer is research and development?

But increasingly the companies are shifting their attention from research and development to gaining the largest market share, which includes massive expenditures on advertising.

The pervasive presence of pharmaceutical ads on air waves cannot be escaped and consumers are paying for every dollar of it. The cost of an ad can vary greatly, but on average a 30-second commercial broadcast nationally is from $350,000 to $500,000.

According to Forbes, during the Academy Awards “the biopharmaceutical industry” – heavyweights like “Pfizer, Novartis, and Lilly had ads, as did the smaller biopharma, Incyte, “ ran ads. “These ads weren’t cheap. Thirty second spots ran anywhere from $1.7 – $2.2 million.”

Forbes concedes that Pharma R&D investment exceeds all other industries, however, Pharma spent $3.9 billion in 2021 on television advertising. According to Statista, “In 2020, the pharmaceutical industry spent 4.58 billion U.S. dollars on advertising on national TV in the United States, unsurprisingly representing a big shift in spending compared to the 2019 pre-covid market.”

Fox News reported expenditures by Humira for one month in 2019 for one-minute ads was $38 million for six television spots: one for psoriasis, three for arthritis, two each for ulcerative colitis and Crohn’s. Ocrevus spent $17.6 million in on month promoting a multiple sclerosis drug at a cost to patients of $65,000 a year. Dovato spent $16.6 million in one month advertising an HIV medication. Ozempic spent $15 million on diabetes medication. Skyrizi spent $13.6 million in one month promoting a psoriasis treatment drug.

Who pays the cost of advertising?

The Congressional Budget Office reported in 2022, “The average net price of brand-name prescription drugs increased substantially over that period (2009-2018): from $149 to $353 in Medicare Part D and from $147 to $218 in Medicaid. Average prices for generic drugs in Medicare Part D and Medicaid fell over that period.”

Nationwide spending on prescription drugs increased from $30 billion in 1980 to $335 billion in 2018 (in 2018 dollars).

Spending on prescription drugs increased particularly rapidly after the mid-1990s with an increase in the number of drugs that attained “blockbuster” status by generating at least $1 billion in sales annually. Those blockbuster drugs generally treat conditions, such as high cholesterol or high blood pressure, that affect a large segment of the population.

Advertising directly to consumers rather than the clinicians who must prescribe a medication must be effective considering the yearly escalation in promotional advertising, which suggests clinicians succumb to pressure from patients.

Earlier this year Johns Hopkins Bloomberg School of Public Health “found that the share of promotional spending allocated to consumer advertising was on average 14.3 percentage points higher for drugs with low added benefit compared to drugs with high added benefit.”

“The findings suggest that shifting promotional dollars to direct-to-consumer advertising potentially reflects a strategy to drive patient demand for drugs that clinicians would be less likely to prescribe,” says Michael DiStefano, PhD, assistant scientist in the Bloomberg School’s Department of Health Policy and Management and lead author of the study.

The study found that the median promotional spending per drug in the study sample was $20.9 million in 2020. The median spending per drug on direct-to-consumer advertising was 13.5 percent of promotional budgets.

According to Johns Hopkins Bloomberg School of Public Health Manufacturers, “six of the best-selling drugs spent more than 90 percent of their promotional budget targeting consumers versus clinicians. These drugs include treatment options for motor neuropathy, various cancers, including breast cancers, multiple sclerosis, and HIV. Drugs treating metabolism and the digestive tract had a significantly lower share of total promotional spending on direct-to-consumer advertising.”

Treasury Wants More Information

15 January 2024
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Ostensibly, to help prevent financial crimes the US Department of the Treasury is demanding more information from thousands of businesses in the US.

As of January 1, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is requiring more information about companies considered to be reporting companies or limited liability companies (LLCs), corporations, and businesses established through filings with the Secretary of State.   

Called the Corporate transparency Act (CTA) the new regulation claims the intention is to stop tax fraud, money laundering, and financing for terrorism by capturing more ownership information from US businesses and companies that operate in the US. Details that must be reported are business information, legal name, trademarks, and beneficial owner information.

Almost any kind of LLC will have to report, including farms and ranches organized as LLCs.

Existing companies have one year to file the report with FinCEN, and new companies are required to file within 90 days of creation or registration.  FinCEN has made a Small Entity Compliance Guide available to help small business navigate the reporting requirements. 

The IRS announced this fall that it is “staffing up” its enforcement operations. They are fast-tracking the hiring of more than 3,700 internal revenue agents across the country. It is the IRS’s second major hiring initiative under the Inflation Reduction Act, which gave the agency roughly $60 billion to rebuild its workforce and modernize over the next ten years.

This “staffing up” is a second one by the IRS, which launched one in early 2023, under authorization of the Inflation Reduction Act which approved the hiring of 80,000 IRS employees, and included funding to arm agents for the first time. About $45.6 billion of the $60 billion was earmarked for “enforcement.”

The IRS claims that the hiring will only replace some 52,000 employees expected to retire in the coming decade and will leave the agency with about the same number of employees (94,000) it had in 2010.

TDS Services Montana Communities

15 January 2024
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TDS Telecommunications LLC (TDS) has now launched broadband internet service in each Montana community where the company is building an all-fiber, high-speed internet network.

TDS has projects under construction in Billings, Butte, Great Falls, Helena, Helana Valley, and Missoula. Built in phases, customers can access TDS services as work is completed in their neighborhood.

The company recently celebrated the launch of service in Great Falls and has begun offering connections for residents in initial build areas in Butte and Missoula. TDS launched service in Billings, Helena, and Helana Valley earlier this year.

“We’re excited to mark another milestone in our efforts to bring Big Sky Country some of the fastest internet speeds in the country. As we enter 2024, we continue working to connect more Montana residents and businesses to high-quality services and gear up to serve our communities for years to come,” TDS Senior Vice President of Corporate Affairs Drew Petersen said.

TDS, operating as TDS Metrocom LLC, is a family-owned company founded in 1969. The Montana network features a robust connection with speeds up to 8 Gig, which allows customers to download and upload files—regardless of size—nearly instantly.

In addition, TDS service includes a digital TV product (TDS TV+) and a variety of phone options. For businesses, the company offers dedicated connections up to 10 Gig.

Schools Push for 4-Day Week

15 January 2024
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The push is on in Montana for four –day school weeks as Montana schools struggle to find staff amid a teacher shortage in the state. School Districts are finding that four-day weeks relieve the stress on over-burdened teachers who are employed, reduces absents, and the need for emergency authorizations. Last year 222 Montana Schools went to a four-day week, about a fourth of the state’s schools. The length of each school day is extended to meet state requirements. Part of Montana’s teacher shortage is attributed to the wages paid to teachers.

The National Education Association rans Montana last in the country when it comes to average starting teaching salaries. The average teacher salaries are also near the bottom compared to what’s paid nationally. With four day weeks having been first adopted by some schools since 2017, data is available to gauge impacts.

Math and reading proficiency has been seen to decline, but graduation rates have increased.  Costs for schools have declined, but short weeks have pose problems for parents in finding care for children or transportation to take advantage of other services provided through the schools, such as free lunch programs.

Schimke, Ag Officer

15 January 2024
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Alex Schimke recently joined Stockman Bank as Ag Loan Officer for the Stockman Bank King Avenue location. His responsibilities include developing and servicing agricultural loans and assisting customers with their lending and credit needs.

Schimke brings an extensive background in agriculture and business, which will be an asset to Stockman Bank and the Billings community.

He has been active in the community, having served as a Board member for several organizations, and is currently Co-Chair of the Billings Chamber of Commerce Agriculture Committee.

Schimke is located at 2700 King Avenue in Billings.

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Montana’s Role in Country’s Energy Transition, Economic Future, and National Security

15 January 2024
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Todd O’Hair, President/CEO

Montana Chamber of Commerce

Advancement in technology is rapidly changing the world we live in, the careers we pursue, and undoubtedly affecting nearly every aspect of our lives. Traditional “big iron” companies like John Deere and GM have become “technology companies”.

Electric vehicles, medical devices, military innovation, energy production and storage, are a small sampling of how technology is inextricably woven into our lives. This is the new frontier, with businesses and our nation investing massive sums in advancing technology to reclaim global leadership, improve national competitiveness, and secure our supply chains. There is a direct link to the role of Critical Materials and Minerals and improvements in our lives.

Unlocking our economic potential and protecting our freedoms hinges on our ability to domestically produce more of the metals and materials that are necessary, including copper, platinum, palladium, zinc, and rare earth elements (REEs) like neodymium and praseodymium. These natural resources – the majority of which are abundant in Montana — are vital to technological advancements and our transition to cleaner energy production and delivery.

A full-scale, global transition will require massive leaps in improved technology production. It is impossible without a corresponding investment and extraction of minerals including copper and rare earth minerals. For example, a wind turbine has 4 tons of copper in every turbine. Additionally, on the security front, guided missile systems, submarine sonar and F35 fighter jets require shockingly large quantities of REEs. In fact, the F35 fighter jet requires more than 920 pounds of REEs alone.

The global race to secure these minerals and develop the processes to extract and refine them is on. And the United States is woefully behind and terribly exposed. With 85 percent of processing and 92 percent of magnet production, China dominates the supply chains that transform ore into sensors and powerful magnets, necessary in renewable energy production. According to the Copper Development Association Inc, China, Russia, Iran, and North Korea, now account for approximately half of all non-U.S. global refined copper production. Limited smelter capacity in North America requires sending raw materials into the market and then barging refined products back across the oceans – not good for stabilizing our supply chain or the environment. It’s a fact: we simply do things cleaner in America, and Montana has some of the most stringent environmental standards for mining anywhere on Earth.

Sandfire’s Black Butte Copper near White Sulphur Springs is permitted and is now weaving through the legal juggernaut. Montana Resources in Butte continues to be a significant supplier of copper and molybdenum and has the potential to provide REEs from the Berkeley Pit. The Sheep Creek exploration is examining rare earth elements in the Bitterroot and Sibyane-Stillwater is a leader in the production and processing of palladium and platinum.

The U.S. Federal Government is also recognizing the importance of Montana’s natural resources to our national competitiveness and securing our critical minerals supply chain. Many of the technological advancements needed rely upon smart photonic sensors, where we are global leaders. The U.S. Economic Development Agency validated this with Montana’s recent designation as a regional technology hub under the CHIPs and Science Act.

The indisputable facts are that the supply and demand for critical minerals such as copper and rare earth elements make the Treasure State vital for our country’s energy transition, economic future, and national security. Montana’s past and current copper resources are well known. Our rare earth elements are less known, but worth exploring. Montana is positioned to meet this challenge. As Montanans we should be supportive of our successes and open-minded to the opportunities.

Montana Tax Changes Effective January 1, 2024

15 January 2024
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* In 2021, Montana passed Senate Bill 399 which made several changes to the state’s tax code effective in 2024. The law consolidated the state’s seven tax brackets for individual income into two and reduced the top marginal rate from 6.75 percent to 6.5 percent. In 2023, the legislature further reduced this rate to 5.9 percent. Additionally, individual taxpayers will be required to use the same filing status on both federal and state returns.

* Montana will also begin taxing capital gains income at lower rates than ordinary income. Capital gains will now be taxed at rates of either 3 percent or 4.1 percent.

Manufacturing Keeps Montana’s Economy Robust

15 January 2024
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Montana manufacturing continues to be one-fifth of the state’s total economic base, according to a new report released by the Montana Manufacturing Extension Center at Montana State University.

The 2023 Montana Manufacturing Report provides a wide variety of data about manufacturing, shows the results of surveys given to manufacturers and displays how MMEC’s services provided help the industry. The Bureau of Business and Economic Research at the University of Montana conducts the annual economic analysis and develops the report. This report marks the 27th year of collaboration between MMEC and BBER.

The report covers the year 2022. According to the report:

* Manufacturing makes up 21% of Montana’s economic base.

* Careers in manufacturing pay about $57,180 in earnings, which is above the state average.

* Over 4,400 manufacturing firms are in operation in Montana, including sole proprietors

* Manufacturing employs more than 22,500 employees

*Manufacturing accounted for 5.5% of total state earnings at $1.95 billion.

* Manufacturing made up 6.6% of the gross state product at $3.3 billion.

* Employs 4.4% of Montana’s nonfarm workforce, with about 22,700 employees.

* Produced 6.6% of Montana’s inflation adjusted output with a value of $3.3 billion;

* Montana manufacturing employment and output growth was a little under double the national average in 2022.

“This year’s report confirms that manufacturing is a robust sector within the Montana economy,” said MMEC Director Paddy Fleming. “We continue to see strong increases in employment and earnings for Montana workers. Moreover, manufacturers are optimistic about starting new businesses here, with the total number of manufacturing firms growing to more than 4,400. In particular, there is large growth among companies that produce food and beverages, transportation equipment and advanced technologies such as photonics.”

The report states, “Montana’s manufacturers face different challenges than the nation as a whole because the composition of manufacturing production is different and is primarily concentrated in non-durable production – the Bureau of Economic Analysis defines nondurable goods as goods that have an average life of less than three years. The two largest manufacturing sectors in Montana, petroleum and coal, and wood product manufacturing, are not among the seven largest sectors nationally, demonstrating how the Montana manufacturing sector differs substantially from the experience of the country.”

In the aftermath of the 2020 COVID-19 recession, Montana manufacturing employment, particularly durable manufacturing, bounced back relatively quickly from the deep economic drop in the second quarter of 2020. Last year, we predicted that durable manufacturing would be higher than pre-COVID levels within a year or so. Employment in this sector returned to pre-pandemic levels in 2021.

Montana manufacturers are active in global markets as well. The three largest export sectors for Montana in 2022 were: chemicals, machinery and transportation equipment. Food, beverages and tobacco fell out of second place during the pandemic. By far the largest export market is Canada, accounting for almost 30% of Montana’s manufactured exports. In 2022, the remaining large export markets were: China (2), South Korea (3), Mexico (4), and  Belgium (5).

Manufacturing in Montana remains predominantly driven by small businesses. According to the U.S. Census Bureau, Montana houses 1,415 manufacturing firms with employees, and a significant 68% of Montana manufacturers employ less than ten individuals. There are no manufacturers with 300 or more workers in the state.

In 2022, about 48% of manufacturers saw increased sales and production, though profits declined, with 33% of durable and 42% of nondurable manufacturers reporting lower profits than a year ago.

A year ago, 55% of nondurable manufacturers increased their capital expenditures. In contrast, in 2022, this proportion decreased to 42%. Durable manufacturing, on the other hand, saw no significant decrease in capital investment.

Two-thirds of firms had a stable workforce size compared to 2021. Less than half, particularly 49% of nondurable firms, reported worker shortages in 2022.

A growing number of Montana-based manufacturers are adopting a more optimistic outlook despite facing challenging economic conditions. Specifically, 32% expect improvements in their supply chains in 2023, which is a notable increase from the 8% who ssexpressed the same sentiment last year.