Montana Main Street Blog

Federal Attempts to "Create Jobs"

Over the next ten months Congress and the President will be debating budgets, bills, tax revisions and more to supposedly "create jobs." Thomas Oliver of the Atlanta Journal-Constitution has a great article about the difficulties in this line of thinking. The federal government can make all the new tax credits it wants, but that is not going to create jobs.

I don't know who originally coined the axiom, "First, do no harm," but that is what the government needs to do in order to get us even close to thinking about an economic recovery. As Congress debates and the President presses for sweeping changes in health care, climate change (cap & trade), card check, different tax rates for investors, different rates for income tax payers, death tax revisions, huge financial and banking reforms, and record deficit spending, my question is this - who would want the risk of hiring new people in a time of record uncertainty? And not just economic uncertainty, but uncertainty largely created by government officials and regulators.

It's not an easy time to be a business owner right now, especially a small business owner. I think most are thinking they are safer just treading water than trying to expand, and it's due in large part to many things being debated in Congress right now. If we want to get our people back to work, we must first understand what's been keeping businesses from hiring new people. Tax credits aren't going to get people back to work in any large numbers.

Bozeman Tennis Court Debacle

The city of Bozeman's decision to use stimulus funds to build tennis courts grabbed the attention of many conservative news outlets, including Fox News and the Drudge Report.

Thinking he may have an opportunity to get on the "fiscal conservative" side of this issue, Governor Schweitzer showed up to Bozeman City Council to express his displeasure with this poor use of funds. What he got was a mayor ready to stand up to him. Here is the exchange as reported by the Flathead Beacon:

Schweitzer: I didn’t come here to blame the city council. You absolutely have the right to do this. You have the green light through the Department of Commerce because they can’t turn anybody down. That was the legislation. It was not the intent of the dollars that came to Montana

Krauss: So if you’re perceived as being a person who has attacked the city of Bozeman. And maybe because you’ve been used by the media or you’ve used the media to do just that.

Schweitzer: Mayor, what were my words? Do you recall?

Krauss: It was a quote about how you did not approve of this. Didn’t approve of this. That this wasn’t appropriate and you didn’t approve of this.

Schweitzer: That’s correct and that’s what I’m saying today.

Krauss: Right. But we have a letter from your administration approving it.

Schweitzer: Sure.

Krauss: So you approved it before you disapproved it.

The report from the Chronicle also brought up how the council questioned the Governor's use of his airplane to fly down to the council meeting, and whether that was a good use of taxpayer dollars. Interesting stuff.

How the State Government Benefits from the Satterlee decision

State fiscal analysts and lawmakers have been waiting for the decision in Satterlee to come out because the state government's general fund would be on the hook for some of the tab. Since the decision would have required payouts to people covered under the Old Fund, the state would have had to pay up to $130 million to pay off the liability. That can erase a budget surplus in Montana pretty quick.

I bet most state lawmakers are happy they don't have to deal with that price tag. Small businesses are celebrating as well.

Property Tax Reappraisal Problems for Small Businesses

There is a lot of blame being shifted on the issue of property tax reappraisal figures that may cause many Montana small businesses to pay much more on their property tax bill.

Republican leaders called a press conference yesterday to point out this problem, and speculating that a special session may be needed to fix the problem. Many legislators are placing the blame on the Department of Revenue for getting the estimates to them very late and incorrectly. This has led to reappraisal figures that are higher than the Legislature intended.

The Governor placed the blame squarely on the shoulders of the legislature as a whole:

"People who have unfairly had their taxes raised, of course they can protest it. That will work for some. For others, they should look to find a legislature that is more competent than this last one, and they can fix it in the next legislative session."

Wow. Did he really say that?

Whoever is to blame, it appears the Governor and the Department of Revenue are not too anxious to do anything about it. Even in this bad economy, the Governor doesn't appear all too eager to help our the thousands of small businesses that could be hurt by this mistake. His statements go back and forth between saying "there isn't really a problem" to "if there is a problem, it wasn't my fault and I don't want to do anything about it."

We will continue to look at this situation and see whether it merits a call for a special session. Now is not the time to be over-collecting taxes from Montana's job creators.

Montana State Government Revenues Down

As reported here in today's Helena IR, state government revenue collections aren't quite what the Legislature had hoped for back in April.

At this point, it's impossible to know exactly where the state is financially because the fiscal year just ended on June 30. There will be money that comes in that is 2009 money, not the current fiscal year of 2010. Still, there are signs that collections won't be as high as expected. We may be dipping into that $300 million budget ending-fund balance sooner than many thought.

The shortfall can be attributed to lower collections in personal income taxes, sin taxes, natural resource and oil taxes. Many of the graphs looked okay this time last year, but collections have been way down in the past six months. The state revenue analyst said this made him worry about fiscal year 2010 and 2011.

We can take comfort that Montana isn't seeing the budget woes of states like California. Generally, Montana lags behind the rest of the country when going into a recession and often lags coming out as well. Let's hope Montana leads the country out of this one.

Montana Chamber Releases 2009 Scorecard for Legislators and Governor

Today the Montana Chamber of Commerce released its 2009 Voting Review of the 61^st Legislative Session. The review is the most comprehensive look at the business and economic issues addressed during the 90-day session. Over 100 bills are included in the scorecard, which received national recognition for its scoring methodology after the 2007 session.

“The Montana Chamber Voter Review is a great resource for the businesses and voters in Montana,” said Montana Chamber President/CEO Webb Brown, “it gives the most accurate look at who is pro-business and who is not. We have pioneered a new way to look at legislative work, and many states are following suit.”

The Montana Chamber looked not just at floor votes, but also committee votes and bill sponsorship. This holistic approach has given the most comprehensive look at business issues ranging from work comp to health care to taxes. Legislators were notified of the Montana Chamber position before key votes. The Business Scores for legislators ranged all the way from 0% to 100%.

The Governor was judged on his signing or vetoing of bills, committee action, and bills that originated from his departments and agencies. The Governor’s Business Score was 31%.

“By considering factors beyond floor votes and bill signings, we have been able to more accurately score an individual lawmaker’s philosophy on business, government regulation, and job creation,” said Brown.

To view the Montana Chamber Voting Review, please click here.

A Preview of the Chamber Legislative and Gubernatorial Scorecard

This post will not contain any actual scores for lawmakers, but it will show you how we are putting together our scorecard:

 

Following last session’s nationally-recognized Voting Review, we are again compiling the most comprehensive review the Montana Chamber has ever done. As always, we have selected a number of floor votes from each house (15 votes to be exact). For the first time ever, and for better accuracy, we have assigned different points for floor vote, since some bills are more important than others. On most of these key votes, legislators were notified in advance of the Chamber position.

 

We also looked at the votes of members who sat on important business-related committees, such as Business & Labor, Taxation, Natural Resources, Judiciary, and more. And finally, we added points for legislators who introduced pro-business bills and subtracted points for legislators who introduced anti-business bills.

Using all these factors allows the Montana Chamber to closely portray an individual lawmaker’s overall friendliness to business, economic development, and job creation. Here is how the Legislative Business Score was calculated:

FLOOR VOTES: On floor votes, legislators were given between 1 and 6 points for each bill when the legislator supported the Chamber position. If a bill is assigned a higher point value, it indicates the bill was more important. No points were awarded for votes against the Chamber position.

For bills that were debated on the House or Senate floor, this Review usually used third reading votes as taken from the House and Senate journals. The third reading vote is the last vote on each bill, and represents a legislator’s final decision on any matter before them. If a legislator was absent or excused for third reading, we went back and looked at how the legislator voted on second reading.

SPONSORSHIP POINTS: For bill sponsorship, 2 points were awarded to a legislator who sponsored a pro-business bill that was supported by Chamber. If a legislator sponsored an anti-business bill that was opposed by the Chamber, 2 points were subtracted. Although this may mathematically lead to some legislators having a score of more than 100% or less than 0%, all scores awarded fall within the range of 0% - 100%.

COMMITTEE VOTES: On committee votes, legislators were given 1 point for each bill when the legislator supported the Chamber position. No points were awarded for votes against the Chamber position. If a legislator did not sit on the evaluated committee, it did not affect the legislator’s score.

P-BASE DISTRICT SCORE: We also included the Power Base (P-base) number for each district to the left of the Business Score. The P-base number is an indication of each district’s support for business as measured by the 2008 scientific P-base poll of 800 Montana voters. A higher number reflects a more pro-business attitude among voters in the district. Those legislators who have scores in the same range as their district’s P-base score are most likely representing their district according to the views of their constituents.

BUSINESS SCORE: Every legislator has a different number of points possible depending on their committee assignments and their sponsorship of bills. A legislator’s individual points earned were divided by the total points possible for that particular legislator. This final number is the legislator’s Business Score. While this score does not encompass all votes on business issues, it is a very reliable indicator of what level of priority the lawmaker puts on business issues vs. other issues.

 

The Gubernatorial Voting Review is very similar. The Governor is scored on bills he signed or vetoed (12 to be exact). He is also scored on the bills that were sponsored or generated by the agencies and departments he oversees. An finally, he is also scored on the committee lobbying done by his departments and agencies.

 

The Montana Chamber Voting Review will be completed as soon as the votes on the veto override of SB 371 are all tallied. That vote will be assigned the most points out of all bills this session since the Montana Chamber made that a top priority. We suspect it should be ready for release by mid-June. Check back soon.

Governor Issues Amendatory Veto to SB 371

The Governor dealt a blow to work com reform by issuing an amendatory veto to SB 371 (Perry-Manhattan). This is the bill that clarifies the law on what qualifies as a workplace injury. An amendatory veto is a privilege the Governor has to say, in short, that he will not sign a bill unless the Legislature makes certain changes. It's still a veto, but it's a way for the Legislature to make a few reforms before sending it back to the Governor. If no changes are made, one would only assume the Governor would issue an outright veto. If the Legislature sits on the bill, it dies.

The Governor would like to see changes in the legislative intent portion of the bill, which contain the WHEREAS clauses ("WHEREAS the Legislature finds that work comp needs reform...."). It's kind of odd for the Governor to amend a bill to say what the Legislature should have intended, but that is not the question of the day. The question of the day is whether the Legislature should concur with the Governor's amendments, since the changes could negatively impact how a court would view the meat of the statute.

The Legislature could leave any day now, so time is of the essence. BTW, the Governor appears to be using this amendatory veto power much more this session. Look forward to a post that delves into that further.

Government Lobbying Government

When people think of the word "lobbyist," many think of people who represent businesses and special interest groups. But if a regular Montanan comes to the Capitol, they will see that one of the largest group of lobbyists consists of government employed lobbyists, including those for local governments and the executive branch.

Take this morning's hearing in House Taxation, for example. We have not one, not two, not three, but four executive branch lobbyists on HB 651. Three come from the Department of Revenue. And the testimony is not informational (term used for testimony that is neither pro or con)- they are actually lobbying the legislature to pass the bill. I'm not sure how much time has been spent preparing for the hearing, but the funds used to pay for this time and lobbying is at the expense of taxpayers. Your tax dollars being used for government lobbying government.

Lobbyists for businesses and special interest groups are required to report their expenses and register (as they should). In many cases, however, these government lobbyists aren't required to register or report their time and expenses. These are little known facts that would likely rub most Montanans the wrong way.

Restricting Competition in Government Contracts

In what appears to be a bill for political pay-back, HB 603 (Rep. Hollenbaugh) would allow the state to require companies bidding, negotiating, or working on any public works projects. Right now, the law says the state cannot require the agreements, which leaves the bidding, negotiating or work for any contractor or business.

Why would the state require these agreements when only a small percentage of the state is unionized and many employees have already decided they would rather not be unionized? It's political pay-back. By limiting unionized companies to the bidding and working on public works projects, the state would be restricting competition. Is that really what we want as we get ready to stimulate the economy through public works projects?

The hearing last night had three administration officials and union lobbyists as proponents, and dozens of private, non-union contractors and employees as opponents. The committee voted party-line (9-9), so the bill will likely sit in committee until Thursday when it will die because of transmittal deadlines.