June 27, 2004

Last modified June 27, 2004 - 2:10 am

Sunday, June 27, 2004

If you think Montana is in tough times, don't blame the economy. Most of Montana's larger cities are growing at a fast pace, presenting new opportunities for urban and rural residents.

That's a message from Larry Swanson, a regional economics specialist at the Center for the Rocky Mountain West in Missoula. Swanson was back in Billings last week at the invitation of Montana on the Move, an effort of community leaders around the state to enhance economic prosperity.

Statewide, Montana statistics on income and jobs aren't great. But take a look at what's happening in Billings, Missoula, Bozeman, Helena and Kalispell. Construction has boomed; populations are growing; business is expanding. These cities are regional economic engines powered by an influx of new residents and service-based businesses. Most Montanans live in or near its seven largest cities.

Montana's urban attractiveness is strongly tied to having nearby open lands, forests, streams and mountains, Swanson said. People want to live in Billings because they can hunt in Eastern Montana, fish the Bighorn River and hike in the Beartooth Mountains.

Despite perceptions that Montana taxes have been eating up ever-larger portions of residents' incomes, the facts show that Montanans actually have been paying a smaller slice of personal income to state and local governments. Montana taxes have been declining as a percentage of personal income since 1985. In that year, state and local taxes equaled 10.24 percent of personal income. In 2002, Montana taxes equaled less than 8 percent of personal income. Swanson predicted that number will decrease to 7 percent when information for 2003 is compiled.

Montanans' income has been rising faster than their state and local tax burdens. That's good. And it shows that our economy is growing, despite perceptions that the state is stuck.

We agree with Swanson that our Montana tax system is obsolete. He said: "You have to have a tax system that mirrors the economy and looks more like everyone elses'. Sales tax is almost a no brainer for a state with less than 1 million residents and 10 million visitors a year."

"As a community, we are overly dependent on property taxes," Billings Mayor Chuck Tooley said. We agree with Tooley that taxes should provide adequate public revenue and fairly distribute the burden.

Dan Kemmis, director of the Center for the Rocky Mountain West, former Missoula mayor and state legislator, added two important points: Tax policy should be pragmatic and developed with a bipartisan approach.

Local voters deserve to have options for sales tax as alternatives to raising revenue exclusively with property taxes. We've repeatedly discussed the disconnect between Billings growth and the moribund revenue stream for necessary public services.

The first challenge for those who want to change public policy is to make sure the public and their elected representatives understand what's really happening with state and regional economies. We invite readers to check the "Learn more" box to find out more about our economic outlook.

Growth in Montana cities offers opportunities that will benefit all Montanans. The next governor and Legislature must be leaders in building on Montana's strengths. They must provide local governments with options for serving their growing communities. State leaders must help smaller communities share that success.