Billings Gazette - Feb 1, 2005
Local government and economic development organizations often struggle to find money to help businesses expand or relocate to Montana. House Bill 249 is the latest effort to remedy this gap.
The bill is a key part of the Montana Democratic Party's jobs proposal and it's endorsed by Gov. Brian Schweitzer, who has included it in his budget proposal. Rep. Monica Lindeen, D-Huntley, is the chief sponsor, but we expect forward-thinking members of both major parties to support the bill.
The high points of HB249 are targeting grants and loans to businesses that will create at least five new jobs that pay well. City and county governments and local economic development agencies will select the businesses to receive funding. That's as it should be; well-connected local leaders are best suited to foster local business and job opportunities. The state should promote statewide development by making start-up funds available through local governments.
New fund in coal fund
HB249 would create another subfund within the state's coal severance tax trust fund. The bill would transfer $20 million from the permanent coal tax trust into the new Big Sky fund, and starting this summer, the portion of severance tax proceeds now going into the permanent fund would go into the Big Sky fund. The permanent fund would continue to have a balance in excess of $500 million, but would not be increased.
The Legislative Fiscal Division estimated that the Big Sky fund would receive $3.95 million in coal severance tax money in fiscal 2006 and that the fund would generate an estimated $1.33 million in interest in fiscal 2006 to be used for economic development grants and loans.
Revisions needed
The original bill draft needs to be changed to require funded projects to create jobs paying at least the average wage in the county. As originally written, the threshold was set as low as the average statewide wage. In counties - such as Yellowstone - where workers earn better than average wages, publicly funded programs ought to be targeting employment opportunities that advance worker compensation rather than bringing it down to the lower statewide level.
Lindeen said she agrees with that change; the lower standard was a drafting error.
Another change suggested in the fiscal analysis makes sense: Big Sky Economic Development funding shouldn't be used to relocate a company from one Montana city to another - unless both local governments agree that's in their best interests.
Lindeen noted that the Big Sky proposal also calls for the business to provide matching funds. "We want to ensure there's some long-term stable growth that's going to occur from this loan or grant," she said.
Lindeen said the state's ongoing economic development efforts will benefit from the stability the Big Sky program will provide. Instead of depending on biennial appropriation or changing gubernatorial administrations, economic development would have an ongoing source of support that would grow steadily for the next two decades.
HB249 would boost long-term development of better employment opportunities in Montana. It deserves bipartisan support.
