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As state budget cuts look to be a certainty next year, an even slower economic recovery in Montana than originally projected might mean a strike of state government employees. There’s at least “a higher probability” of a strike, said economist Paul Polzin at last week’s Economic Outlook program in Billings, in response to an audience question.
Polzin noted that the last time the state faced a potential strike was in 1990.
By Dave Galt
Montana Petroleum Assocation
It’s not just Centrocercus, the sage grouse. It’s also a century-old law called the “Antiquities Act of 1906.” These are just two of many levers that are being pushed to bring oil and natural gas production to a halt in our country, and Montana has a front row seat for watching it all.
Citing the need to protect sage grouse mating areas from oil and natural gas activities, national environmental groups have sued to stop energy development in the bird’s habitat in a number of states, including in some of the Montana’s oldest oil and gas fields where the species has been breeding and nesting, co-existing with drilling rigs for decades.
By Phil Drake
The BP oil spill in the Gulf Coast has wreaked not only environmental but financial havoc since it began April 20. But as other states investing in the oil giant have lost money, the state of Montana’s investment system managed to make $92,000, an official said this week.
“Our external managers began buying and selling BP stocks since the oil leak and actually made a profit,” said Carroll South, executive director of the Montana Board of Investments, which is authorized to invest the state’s funds, including all state and local pension funds.
Now is the time to nominate an outstanding agricultural leader to be honored during the 2010 Agricultural Appreciation Weekend at Montana State University.
The College of Agriculture at MSU gives one or more Outstanding Agricultural Leader awards each year to people who have exhibited outstanding leadership in Montana in public service, as an agricultural producer, industry advocate, agri-business leader, and dean’s friend of agriculture.
The Montana numbers that supporters toss out just don’t add up...
“We’re from Washington and we’re here to help” never had a more hollow ring or was more factually baseless than in the claims made by some health reform supporters in the number of small businesses that would qualify for the new health insurance tax credit passed under the Patient Protection and Affordable Care Act.
“Supporters claim 4 million small businesses are eligible for the temporary credit, but the fact is less than 2 million small businesses will receive it,” said NFIB tax counsel Bill Rys. “This recently-released research shows how many small businesses will be eligible, but it doesn’t take into account whether the firms even offer health insurance.”
By Michael Noyes
Payments for unemployment benefits doubled last year as the amount of money in the state’s trust fund fell by 39 percent.
Roy Mulvaney, administrator of the state’s Unemployment Insurance Division, said the trust fund had $126 million as of May, down from $206 million a year ago. Benefit payments jumped from the $90 million to $93 million range in fiscal years 2007 and 2008 to $180 million in fiscal year 2009.
“The good news is, employers have responded,” Mulvaney said. “They have maintained the trust fund ... I’m sure it’s a challenge for them.”
While payments are up and the trust fund balance has decreased, Montana’s unemployment insurance fund is still in a stronger financial position than most states.
According to statistics provided by the U.S. Department of Labor, 31 states and the Virgin Islands have outstanding loans from the federal government that total more than $38 billion to pay unemployment benefits as of June 15.
“As far as being insolvent, we don’t believe we’ll get to that point,” Mulvaney said of Montana’s unemployment trust fund.
He said the fund was insolvent at one point in the early ‘80s, but that fixes have been put in place by the legislature since then to guard against that risk.
Webb Brown, president of the Montana Chamber of Commerce, said the system isn’t perfect but that it has worked at a time when other states are borrowing money to pay their benefits. He said lawmakers should guard against the temptation to expand benefits to part-time workers or other measures that would further strain the system.
“The system is actually working the way it was intended,” Brown said. “It (takes) constant vigilance on the system to make it work the way it does.”
Montana has a tiered unemployment insurance rate schedule. A formula is used annually to determine how much employers must pay. As the trust fund is depleted, the rates are more likely to increase and vice versa.
For the past several years the rate schedule has been set at 1 out of a possible 11, the lowest amount.
In January, the rate schedule was raised from 1 to 5. That is the highest rate schedule since it was at 6 in 1988. (In 1988 there were only 10 possible rate tiers.)
In 2009 the average employer payment rate was 1.12 percent of up to 80 percent of the average annual wage for each employee up to a certain amount. In 2010 the average rate is 1.92 percent up to the first $26,000 in employee income, according to Mulvaney.
He said the system in place allows the fund flexibility to correspond with the economic conditions. A handful of other states have contacted Montana to see how they have remained solvent as other states borrow money to pay benefits.
Mulvaney said some states cap the taxable wage base as low as $7,000, as opposed to $26,000 currently in Montana, and some don’t have the range of rate schedules that Montana maintains to address potential shortfalls.
Rate schedules are determined by a formula and are typically released to employers in December to take effect on Jan. 1 of the upcoming year. The unemployment rate in Montana for May was 7.2 percent, according to the Bureau of Labor Statistics. In May 2009, the rate was 6 percent.
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The Big Sky Business Journal
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Billings, MT 59103