This fall, Montana National Guard members will be able to attend Montana State University Billings tuition-free.
Members of the Montana National Guard are eligible for scholarships, federal tuition assistance, and the GI Bill. The tuition waiver is available for Montana National Guard members as a “last-dollar award,” meaning it will make up the difference between the total cost of tuition and the sum of other funding, such as grants and scholarships that are received.
“This waiver will ensure that tuition is not an obstacle for our Guard members to pursue their higher education,” said Dawn Githens, retired Col. Air Force, director of the Military and Veterans Success Center. “It is one more service we can provide to those who serve our country.”
The waiver will be available starting Fall 2020 semester to all Montana National Guard members who do not have a bachelor’s degree or higher and who meet the admission requirements of MSUB or their Montana University System school of choice. In addition, waiver recipients must be certified as a Montana National Guard member in good standing by the Adjutant General.
“This tuition waiver will help keep members of our National Guard here in Montana, united with their families, continuing their education and strengthening our state’s workforce,” said Chancellor Dan Edelman. “Members of our Montana National Guard fulfill a crucial role for our state and our nation in times of need. Increasing access to higher education in our state with this tuition waiver is also a recruitment benefit for the Montana National Guard.”
Government
Congressmen Get Millions in Pensions and Benefits
By Bethany Blankley, The Center Square
As the nation struggles with record high unemployment, extended job losses, continued statewide shutdowns, and crippling national debt, a new report reveals that congressional leaders will receive an estimated $1 million each in retirement payouts on top of their lifetime pensions, fully funded by taxpayers.
First published by Forbes, OpenTheBooks.com’s report, “Why Are Taxpayers Providing Public Pensions To Millionaire Members Of Congress?” compares the financial benefits that both top leaders in Congress receive.
“We’ve said it before and we’ll say it again – Congress is an exclusive club where members vote for their own benefits,” Adam Andrzejewski, CEO and founder of the nonprofit watchdog organization, says.
By law, all 535 members of Congress receive a public pension plan and a taxpayer-funded, five-percent of salary 401(k)-style savings plan, in addition to salaries of $174,000 and higher. Speaker of the House Nancy Pelosi’s net worth is reportedly between $50 million and $72 million; Senator Majority Leader Mitch McConnell’s net worth is reportedly roughly $22 million. Their current salaries are $223,500 and $193,400, respectively.
Pelosi has received $5.7 million in total salary for the 34 years she has been in office. McConnell has received $5.5 million for the 36 years he’s been in office.
Both the Speaker and the Majority Leader voted for several spending packages this year, including the CARES Act and the Families First relief bill, which will increase the national debt by $1.76 trillion, and $192 billion, respectively, according to the Congressional Budget Office (CBO). The small business relief act added $480 billion to the total.
Spending increases and tax cuts in coronavirus legislation may increase debt initially by roughly $2.4 trillion.
Chris Edwards, an economist at the Cato Institute, estimates that the effect of the recession will reduce federal revenues a further $2.2 trillion over the next few years. With higher spending and lower revenues, federal borrowing costs are expected to be approximately $1.2 trillion higher over the next decade.
The basic CBO estimates exclude these costs, Edwards notes. All told, these decisions will add an estimated $5.8 trillion to the national debt.
And both leaders are expected to vote on another stimulus bill, which will add to this total.
Part of the spending problem contributing to this debt, OpenTheBooks.com notes, is the taxpayer-funded lifetime pension and taxpayer-matched savings plans members of Congress receive.
“Critics question the necessity of such a system,” Andrzejewski writes. “Why are U.S. taxpayers providing public pensions to millionaire members of Congress on top of a 401(k)-style plan? (The median net worth for a member recently exceeded $1.1 million.)”
Auditors at OpenTheBooks.com evaluated the financial benefits Pelosi and McConnell receive from taxpayers.
When Pelosi retires, she will receive $153,967 a year in public pension and Social Security benefits, in addition to an estimated $1 million lump sum through her federal saving account, OpenTheBooks auditors found. They explain this “is just the portion of the account that was taxpayer-funded.”
Taxpayers also paid $282,965 into Pelosi’s federal Thrift Savings Plans, which OpenTheBooks estimates grew to $1.03 million if invested in an S&P 500 index fund, as of Dec. 31, 2019.
Similar to Pelosi, taxpayers invested $273,700 into McConnell’s federal Thrift Savings Plans, which OpenTheBooks auditors estimates grew to $1.1 million if invested in an S&P 500 index fund as of Dec. 31, 2019. They add, this “is just the portion of the account that was taxpayer-funded.”
Researchers at the National Taxpayers Union estimate that McConnell’s pension and annuity package will be $142,902 annually if he retires after the 2020 November election.
U.S. Sen. Mike Braun, R-Indiana, has proposed a bill to change the law, arguing that members of Congress have the “option to forego the generous retirement plans offered to representatives and senators and opt instead for a more conservative, savings-based plan like those of the Americans they represent.”
The bill, S.439, passed the U.S. Senate on Dec. 19, 2019, and sits in the House.
Braun notes that the median minimum net worth of members of the 115th Congress was $511,000, while the median net worth of a U.S. household in 2016 was $97,300.
The collective wealth of members of the 115th Congress was at least $2.43 billion, with 43 members who were millionaires, he said.
Even factoring in federal employees, only 23 percent of all U.S. workers contribute to a traditional pension, Braun adds, down from 38 percent in 1980, as traditional pensions continue to be phased out by private sector companies in favor of 401ks and other savings plans.
Department of Agriculture Releases Initial Report on Beef Packing Business
The US Department of Agriculture (USDA) has released an initial report about the beef packing industry.
It’s been a year since Ag Secretary, Sonny Perdue, launched an investigation into the meat packing industry amid concerns that there might be illegal manipulations or collusions going on regarding the pricing of meat products.
The initial report does not address those concerns, but evaluates the market conditions and makes recommendations for changes that might improve the industry’s vitality. USDA states that their investigation regarding the possibility of illegal market manipulations will be on-going.
In general, the agency addresses some of the problems they found and makes recommends for additional regulations and for tweaking existing regulations, which were put into place to create and sustain a concentrated market, dominated by a few large companies. A concentrated market means a market that is mostly monopolistic with only a few established companies in operation, protected by restrictions which curb potential competition and inhibits self-correcting market forces.
The USDA analysis found that a fire at Tyson Packing Plant in Holcomb, Kansas, in August 2019, which took 5 to 6 percent of the nation’s beef processing capacity off line for five months, largely contributed to earlier disparities in pricing. The fire, unfortunately, coincided with a peak demand for beef that occurs around Labor Day every year. Because the shortage pushed up the price of boxed beef, market forces kicked in and other plants were encouraged to increase production which compensated for the capacity lost at the Holcomb plant.
Even before the coronavirus, there was concerning disparities between the price of Choice boxed beef and the prices that ranchers received for fat cattle. Prior to the onset of the virus, the spread between the two price points was $67.17 per hundred pounds of meat. The gap became even wider with the impacts of the coronavirus
When many employees of packing plants began contracting COVID-19, prompting the closing of facilities, processing capacity dropped by 40 percent by the end of April. At that point, the difference in what packing companies received for boxed beef and what they paid the livestock producers for the beef was $279 per hundred pounds of beef – a whopping 300 percent above the record, set just months earlier.
As restaurants reopened and public activity returned to more normal conditions, in May the gap between the two price points began to narrow and it continues to do so.
Changes in the beef market were already in play in March due to the way consumers changed their buying habits. Stay- at –home mandates across the country prompted more people to prepare food at home which increased demand at grocery stores. As in keeping with the natural law of “supply and demand”, the increased demand pushed up those retail prices. At the same time the forced closure of restaurants, brought about a dramatic drop in demand for beef for food service companies, which are a different distribution system than that which serves grocery stores. Regulations prohibited the redirecting of the surplus beef in the service supply line, to areas of greater demand such as grocery stores, which would be expected to happen in an unrestricted market.
The USDA recommends improving transparency in pricing by imposing a regulation that would require packers to negotiate at least half of their weekly cattle needs on “the negotiated cash market” for product that is to be delivered within 14 days. The report said that when the events that led to reduced packing capacity happened “cash trade plummeted, making it difficult for industry participants to know prevailing prices.
The USDA also suggests that cattle producers do not know how to manage market risks and need government directed “risk management training.” They also point out that the Risk Management Agency’s Livestock Gross Margin and Livestock Risk Protection program can be improved to help producers manage risk.
When consumers found empty shelves in their grocery stores during the COVID panic, they turned to local small processors or tried to purchase meat directly from the farmer or rancher. The demand quickly overwhelmed the small producers, a problem the USDA suggests could be helped by offering grants to assist small meat processors to expand their businesses, which would increase competition in the overall packing industry.
The document states, “USDA further recognizes there are many discussions about reducing the burden for smaller meat processors, asserting that the high cost of compliance with Federal requirements are barriers to entry and/or survival.”
It goes on to recognize, “The current pandemic has also created a resurgence in demand for services provided by these small and very small processors, and for consumers who are interested in buying their meat more directly from the farm and ranch where it was raised… USDA is committed to working with stakeholders to balance food safety with these growing consumer preferences and growing e-commerce platforms.”
Pointing out that small producers and cooperatives often struggle to cover the mandated costs of operation, the agency reminds that there is USDA Rural Cooperative Development Grant funds to provide assistance in organizing and forming co-ops.
Also, the agency sees a need to update the Packers and Stockyards Act, which regulates the industry. The report states, “Beyond rulemaking, small and medium-sized producers could also benefit from updates to the P&S Act designed to offset the impacts of operating in a concentrated industry, where the market power resides with large meatpackers. Smaller producers often find themselves to be price takers in the market for fed cattle and lack the volume of larger producers to negotiate unique and advantageous marketing agreements with large meatpackers.”
Flexibility Act Gives Options
With the passage of the Paycheck Protection Program (PPP) Flexibility Act by Congress, the US Small Business Administration has announced it will promptly issue rules and guidance to implement them, including a modified borrower application form, and a modified loan forgiveness application.
The modifications will implement the following important changes:
Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
* Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75% of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered
period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
* Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration related to worker or customer safety requirements related to COVID–19.
* Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
* Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
* Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender
* In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
SBA Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin said, “We want to thank President Trump for his leadership and commend Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader McCarthy for working on a bipartisan basis to pass this legislation for small businesses participating in the Paycheck Protection Program.
“This bill will provide businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country.”
Emergency Fund for Businesses
Drawing upon the $1.5 billion that the federal CARES Act extended to Montana to deal with COVID-19 crisis impacts, the state has established a $123 million emergency grant program for small businesses, non-profits and individual impacted by the shutdowns and safety protocols.
The Governor announced nine programs that will be available to businesses, social service nonprofits, farms and ranches, emergency housing and food bank assistance, telework and seniors.
The grants addresses needs identified by the state Coronavirus Relief Fund Advisory Group, which was appointed by the Governor.
Organizations that haven’t yet received federal relief loans will be given priority by the Department of Commerce which is administrating the program.
Businesses and non-profits should prepare tax ID, proof of business registration, a brief description of the proposed project and covid-19 impacts.
The Montana Business Stabilization Grant program will provide working capital for Montana-owned small businesses with 50 or fewer employees that have sustained a loss of revenue due to COVID 19. Current funding available is $50 million, the maximum award amount per business is $10,000.
• The Montana Innovation Grant program is intended to help companies scale up, improve capabilities, or drive expanded distribution of products or services developed in response to COVID-19. Non-profit and for-profit businesses of less than 150 employees with primary operations in Montana that have created an innovative product or service intended to directly confront the COVID-19 emergency can apply for grants of up to $25,000. Current funding available is $5 million.
• Montana Food and Agriculture Adaptability Program grants are available to food and agriculture businesses to help increase community resilience amid the economic disruptions. Current funding available is $500,000, with a maximum grant award of $10,000.
• Emergency Housing Assistance Program will provide rent, security deposit, mortgage payment, and/or hazard insurance assistance as-needed for Montanans who have lost a job or substantial income loss of the economic shutdown. Initial payments may include up to three months assistance where the eligible household can demonstrate arrears for April and May, with continuing inability to make their June payment. Montana Housing will pay the difference between 30 percent of the household’s current gross monthly income and their eligible housing assistance costs, up to $2,000 a month. Household income limits range from $75,000-$125,000 based on family size. Montanans receiving other forms of housing assistance are not eligible. Total funding available is $50 million.
• Public Health Grants are available to local and tribal health departments and urban tribal clinics and to meet the needs of their communities. Each organization is eligible to apply for funding. Current funding available is $5 million.
• Stay Connected Grants ranging from $500-$2,000 per applicant are available to reduce social isolation among Montana’s seniors. Eligible applicants include area agencies on aging, assisted living facilities, nursing homes, and tribal elder services. Grant funds can be used to fund technologies and other efforts to encourage physically distant forms of social interaction for elderly Montanans. Current funding available is $400,000.
• Food Bank and Food Pantry Assistance of up to $50,000 per applicant are available to increase food security for Montanans. Eligible applicants include community organizations providing food assistance to Montanans with limited resources, food banks, food pantries, community cupboards, and entities with infrastructures already in place to begin new food distribution programs. Current funding available is $2 million.
• Social Services Nonprofit Grants of up to $10,000 per applicant are available for nonprofit organizations impacted by the COVID-19 public health emergency to retain existing programs and services, employees, or organizational viability for provision of future services and operations. Eligible applicants are registered, Montana-based social service nonprofits that were operating prior to February 15, 2020. Current funding available is $10 million.
• Telework Assistance Grants of up to $1,000 per individual will go towards purchasing equipment to assist Montanans with disabilities access telework equipment. DPHHS will partner with a local non-profit organization to assess and support assistive technology needs of individuals with disabilities. This assistance will help people with disabilities have the equipment needed to adapt to the change in working environment due to required protocols. Current funding available is $650,000.
Associations Collaborate to Fill Education-to-Industry
The Montana Contractors Association, MCA Education Foundation and the Montana Equipment Dealers Association have developed a joint action plan and strategy, Build Montana, to address the immediate and long-term workforce challenges of the construction industry. Build Montana is a strategy to create a bridge between workforce and industry, and to increase the pipeline of people entering the construction industry.
“Interest and awareness of the strong career paths available in the industry is at a point where many young people are either unaware or discouraged from a construction trade career path,“ said MCA President Bob Warren (Schellinger Construction). “In order to change these perceptions and misunderstandings, it will require industry to actively engage with schools, teachers, administrators, parents and their communities.“
This program is being created as the result of several factors that have impacted hiring and workforce sourcing in the construction industry over the past few decades. In addition, the events surrounding COVID-19 resulted in construction being declared an essential service, and thereby creates opportunities for adults who want to change careers.
“We intend to aggressively build awareness among Montana youth about rewarding careers in the construction industry, focusing on Montana youth, families, teachers and school administrators,” said Adam Gilbertson, MEDA President (RDO Equipment Co.). “We will also focus on onsite internships that give high school students real-life exposure to careers. Finally, we want to fill the pipeline to Montana’s 2- and 4-year technical degree programs.”
Build Montana has developed an implementation strategy which includes:
1. Contract with an individual or firm to build relationships with students, teachers and administrators. The individual will create partnerships between local contractors and dealers to engage with schools and represent the industry at school-based events, teacher, administrator and school board association meetings. The MCA is actively seeking a highly qualified individual or organization with whom to contract. Details can be found here: https://www.mtagc.org/lets-build-mt.html
2. Implement a marketing campaign which includes a new web site, social media campaign, podcasts, and promotional material.
The MCA and MEDA have committed to a $225,000 campaign over the next 18 months. The MCA’s Education Foundation, a charitable organization, will serve as the fiduciary agent, making contributions to Build Montana deductible as a contribution. The expected launch for all components is July 1.
For more information contact David Smith at the MCA, david@mtagc.org 406-442-4262.
Consumer Prices Decline
A key measure of U.S. consumer prices declined in April by the most on record as travel and apparel spending collapsed during the coronavirus pandemic, reports Bloomberg.
The core consumer-price index fell 0.4% from the prior month after a 0.1% decrease in March. That’s the biggest drop in data back to 1957. Compared with April of last year, the core CPI rose 1.4%, the smallest annual gain since 2011.
A key measure of U.S. consumer prices declined in April by the most on record as travel and apparel spending collapsed during the coronavirus crisis.
The core consumer-price index, which excludes volatile food and fuel costs, fell 0.4% from the prior month after a 0.1% decrease in March, Labor Department figures showed Tuesday. That’s the biggest drop in data back to 1957. Compared with April of last year, the core CPI rose 1.4%, the smallest annual gain since 2011.
County Gets Grant for Cyber Security
Yellowstone County’s Disaster & Emergency Services Coordinator K. C. Williams has received a letter from the Department of Military Affairs for Montana announcing that his application for a grant to improve cyber security for Yellowstone County has been approved.
Official notification will probably not come until about September, said Williams, but at least tentatively the Senior Advisory Committee and the Homeland Security Advisor has selected Yellowstone County’s Cyber Security project for inclusion in Montana’s application to the Department of Homeland Security and FEMA for fiscal 2020. (Emergency services in Montana operate under the auspices of the Department of Military Affairs.)
The $75,000 grant will allow the county to make the needed improvements in a more complete, holistic approach than the phases that the county would otherwise have had to pursue. The end results will be much better, said Williams, and it won’t have to be funded by Yellowstone County taxpayers.
A few months ago, Jeff Slavick, Director of Information Technology in Yellowstone County, submitted a proposal to County Commissioners to begin the process of updating the county’s cyber security which he said was woefully inadequate. Upon learning this, Williams pointed out that improving cyber security of government agencies was a high priority of Homeland Security and they were making grants available.
Williams submitted an application for Slavick’s proposal. Some security the county has to provide by law, but much of it is just matter of good stewardship.
“It is just a better idea to be more secure” with all of the county’s electronic documents and data storage, said Williams, explaining that the county interacts with a lot of government agencies, as well as the civilian population, all of which are subject to potential cyber threats.
The grant will probably have an effective date of October 1. Williams said that he expects that the federal government will require that the project be completed within a year from the effective date.
Billings Airport to Get Grant Funding Under CARES Act
U.S. Secretary of Transportation Elaine L. Chao announced that the Department of Transportation’s Federal Aviation Administration (FAA) will award $1.187 billion in airport safety and infrastructure grants. The total includes $731 million in Airport Improvement Program (AIP) grants and an additional $455 million in Supplemental Discretionary grants. The money will be available for 100 percent of the eligible costs under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
“This Federal investment of over $1 billion represents the Department’s continued commitment to the safety and efficiency of our nation’s airports for the traveling public,” said U.S. Transportation Secretary Elaine L. Chao.
A complete listing of grants (PDF) and an interactive map of airports receiving funding is available on the FAA website. Montana has received about $15 million and in this award will receive a total of $7.7 million. Billings Logan International Airport will receive $255,410 to reconfigure the runway; $ 2,117,366 to expand the terminal and $663,063 to acquire land for approaches.
“The 439 grants will ensure that airport sponsors can make the necessary improvements so their airports can operate in a safe and efficient manner for years to come,” said FAA Administrator Stephen M. Dickson
18.7% Unemployment in Montana
By Michael Lucci, The Center Square
Real-time unemployment rates climbed across all states during the week ending April 18, based on data from the Department of Labor. A new wave of 4.4 million American workers filed for unemployment insurance benefits, bringing the total count of initial unemployment claims up to 26.4 million in the last five weeks of Department of Labor data.
Montana’s real-time unemployment rate was 18.7 percent. Nationally it had climbed to 21.4 percent on the initial claims data, based upon 50 Economy labor market estimates. Initial claims have decreased week-over-week for three weeks in a row. However, the total count of unemployed American workers continues to climb by millions per week even as new claims slow down.
Real-time unemployment rates vary widely across the states from Kentucky (31.2%) Pennsylvania (29.1%) and Michigan (28.7%) at the high end to Wyoming (12.5%) Utah (11.7%) and South Dakota (9.3%) on the low end.
The real-time unemployment rate uses March Bureau of Labor Statistics data as a baseline, and includes recent workforce dropouts as unemployed. This baseline unemployment count is combined with 5 weeks of initial unemployment claims from the Department of Labor to arrive at the total estimate of unemployed for each state.
This method shows an estimated 35 million unemployed Americans through April 18.
The federal CARES Act and the extensions of its aid provisions have provided financial support to workers and businesses affected by the crisis in order to help them survive the crisis. The coronavirus pandemic has dramatically depressed economic activity, consistent with prior economic research on pandemics, and economic activity will not return completely until there is a vaccine or curative drug for the virus. States now have the tremendous responsibility of executing safe strategies to gradually reopen their economies, balancing the trade-off between healthcare risks and the risks of an economic depression.
Once states are re-opened, they can ease regulatory red tape in order to allow for more efficient business formation and job creation. Re-opening strategies should be followed up by public policy reforms that make it easier to start businesses and find new jobs. State and local red tape should be scaled back, and state tax codes should improve their treatment of operating losses and the depreciation of new business investments.
America needs innovation and growth from the private sector in order to pull the economy out of crisis. This can occur more rapidly if there is policy innovation in the public sector to clear the pathway to economic success. Federal government aid to help businesses survive should not be unwound by state and local red tape. Policymakers can instead take a proactive role in advancing overdue measures to produce a better tax code and lighter regulations.
Michael Lucci is the President and publisher of 50economy.org. He also serves as a Senior Policy Advisor to the State Policy Network. He was the Vice President of State Projects for the Tax Foundation.
