Over the years in reporting on business in Montana, and as once more I see the dismal rating of Montana in the SBE study about the kind of environment in which entrepreneurs must function, I am struck at how little difference reality makes in political circles.
From forty years ago, I recall reporting on what business people said were their barriers to success in Montana. Except for the labor supply, their answers were almost exactly the same as they are today. That means that not much has changed despite all the political posturing that's occurred in the meantime.
I remember as a grade school student, before even knowing what "economy" meant, being taught that Montana was one of the most economically vibrant states in the nation. What happened? Answering that question is not important unless one intends to act on the answers. Over the years, only one or two real business concerns have been addressed, while numerous other problems have been added. That's why the Montana Chamber of Commerce's Envisions 2026 program is so interesting. Not only are the problems identified more in keeping with what the business people say are their problem - and not only do they identify strategies to solve the problems - but the program actually sets a time frame in which to achieve the goals.
The issues targeted by Envisions 2026 have to do with broad changes which will improve conditions for all businesses, not just a special few. Identified as goals are broad-based tax reform, reducing costs that impact all businesses such as workers' compensation, reducing regulations, changes in the judicial system so that Montana is a predictable place in which to do business, eliminating the fees and licensing requirements that stand as an open invitations for our children and grandchildren to leave the state.
These are the underlying issues for business in Montana that have only been growing as barriers over the decades. To make changes will not be easy; if they were they would have been done long ago. But, without such a concerted effort, we will be looking at the same issues in another forty years and Montana will be an even more difficult place for the survival and success of business. There is no alternative other than to deal with the real problems as they really exist.
So many ideas about how to solve Montana's economic issues side step the real problems because they are not in line with the politically correct mantra, so even when people know the validity of the complaints, they lack the courage to confront them. In lieu of courage, most of the efforts are more window dressing than substantive.
The grandiose schemes of programs like "Build Montana," or government make- work strategies are basic take- money- from- Peter- to -give -to -Paul games. While they may serve political gamesmanship, they do not build economic foundations. We, and other states, have done enough of those things to have more than proven that. Taxpayer-funded "gifts" that are more akin to welfare for the wealthy, can be just as detrimental as beneficial. In order to gauge the real economic benefit of paying tens or hundreds of thousands of taxpayer dollars to entice a business to come to a community, one must in all honesty - and in all morality - also gauge the losses suffered by already established businesses because of the subsidized competition. And, sad to say, economists have, for decades now, claimed that there are few real benefits from such efforts - not to mention the political corruptness that such cronyism engenders.
If paying less in taxes makes a select few businesses more viable and helps them create more jobs, then surely that just proves the case that lower taxes for any business does likewise, and it demonstrates most clearly the direction government should be headed if building a stronger economy is the true goal.
To make broad changes, which creates an overall regulatory and tax environment that gives every business as much an edge as possible, is fundamentally what every government, at all levels, should be aimed at doing. That creates incentives for all businesses. No political connections necessary, no favoritism, no picking winners and losers.If there were people who didn't believe that political policies, regulations and tax levels matter, then the events of the past few years at the Montana /North Dakota border should surely have convinced them otherwise.
The geology of the Bakken does not stop at the border and yet the economic growth seems to. A mile is no shorter in North Dakota than it is in Montana, and yet spin-off industries from the oil development seem to always prefer locations to the east rather than to the west.
In an age when government wants to "study" everything, that no one has remotely suggested studying this strange phenomenon, pretty much says all that needs to be said about the sincerity of wanting to change Montana's economic fortunes. No need for a study - everyone already knows the answers.
Most failed efforts to "jump start" business in Montana are based on the false premise that business is dependent on the success of government, when in fact the opposite is true. Government, at all levels, is wholly dependent on the well-being of business and the wealth generated by the investments and hard work of entrepreneurs and their employees in the private sector.
Because of that, advocates of government should be just as concerned about the environment in which the private sector must function as are business owners. In order to keep such allegiance, the vagaries of government should be tightly aligned with those of the businesses which must function within its realm.
Government should not be able to seek out new kinds of taxes or raise current tax rates because revenues are not adequate. Having to maintain an unchangeable rate of taxation - no matter what kind of tax it is - keeps the political-foot to the fire of reality. It keeps the centralized-planners and rulers interested in what their policies are doing to the rest of the world.