Economist: Billings lags in city spending
By ED KEMMICK
Of The Gazette Staff At
least one Montana economist doesn't find much to cheer about in the
growth of the oil industry in Eastern Montana.
Larry Swanson,
director of the O'Connor Center for the Rocky Mountain West at the
University of Montana, said the oil boom has created jobs in a few
counties, but the high oil prices that made the boom possible have
burdened the rest of the state's economy.
Speaking to an
audience of about 300 people at a breakfast on the Montana State
University-Billings campus Tuesday morning, Swanson said Montana
ranked ninth in the nation in personal income growth from 2001
through this year. But that growth has slowed since the first
quarter of 2005, he said, mainly because of higher energy
prices.
Swanson also said there has been a "systematic
disinvestment" in public services in Montana - in other words, that
tax revenues have not kept pace with overall growth in population
and income. He said property taxes in Montana as a percentage of
personal income dropped from 10.2 percent in 1984 to 7.55 percent in
2003.
In a comparison with 29 "peer cities" throughout the West -
cities that resemble Billings in population and other demographics -
Billings' per capita income growth of 33 percent between 1990 and
2000 ranked it well above average, Swanson said. But in comparing
local government's share of total employment, Billings was eighth
from the bottom of the list, and Missoula, another of those peer
cities, was lower still.
Swanson, whose appearance was
sponsored by the Celebrate Billings group, said cities elsewhere in
the West generally invest more in public services than do cities in
Montana.
"When people say you're spending too much for police
and fire - please," he said. "Get out of town, travel a little
bit."
It matters how much cities invest in themselves,
Swanson said, because 71 percent of the people in this state live
within 40 miles of its seven largest cities, which he said have
become the state's "economic engines."
If Montana wants to
position itself to capitalize on its real economic strengths, he
said, it has to acknowledge that its metropolitan centers are
driving the economy, and that those cities need to keep making
improvements in order to maintain their leadership roles.
As
he has on other visits to Billings in recent years, Swanson said
people at all levels of government are missing the boat because they
make decisions based on "economic mythologies" rather than
realities. He said the reality is that labor earnings based on
mineral extraction, including coal, hard-rock minerals, gas and oil,
have consistently made up only about 3 percent of the state's total
labor income for the past six years.
Another reality, he
said, was that in 2003, total crop and livestock marketing receipts
did not exceed the costs of production in a single Montana
county.
Yet politicians, including Gov. Brian Schweitzer,
continue to frame economic development discussions in terms of
bolstering traditional industries, mainly agriculture and mineral
extraction, Swanson said.
Swanson said the major cities in
Montana are benefiting from same trend affecting cities all over the
Rocky Mountain West: People are moving here from elsewhere in the
country, attracted by the proximity of mountains and public lands
and bringing with them an infusion of nonlabor income, mostly from
investments and retirement income.
At the same time, Swanson
said, Montana has been unable to hang on to its young adults, those
in the 25-to-35 age group, and projections call for a continuing
aging of the population. According to Census Bureau projections,
Montana by 2020 will have the fourth-oldest population in the
country, behind only Wyoming, Arizona and Florida.
Because of
the aging population and the inability of the state to retain its
young adults, the most important economic issue in Montana four or
five years from now will be the labor supply, Swanson said. That
makes institutions like the College of Technology vital, he said,
because they are training workers to expand the state's
economy.
The reality is that government spending is not
keeping pace with growth, he said. Between fall 1999 and fall 2005,
enrollment at the College of Technology more than doubled from 492
to 1,040. But state funding of the college has only been creeping up
- from just less than $1.3 million in 1992 to just less than $1.8
million budgeted for next year.
Swanson said the major cities
need to play a larger role in controlling their own futures. One way
to do that would be for the Legislature to give cities the authority
to ask for voter approval of local-option taxes. Such taxes make
sense because they would be levied, collected and spent
locally.
The wide diversity of Montana's economy and the
varying needs of the state's major cities make it impossible to find
one-size-fits-all solutions in Helena, he said, so local-option
taxes would give cities the power to plan their futures.
What
those cities need, he said, is adequate police and fire protection,
a good educational system and a solid infrastructure. They also need
customized work-force development and locally created economic
development planning, he said.
More than anything, Swanson
said, people need to start learning about the true structure of the
Montana economy if they want to be positioned to take advantage of
it.
"We've got to figure out how not to avoid the things
we've got to talk about in public forums," he said.
Jim
Duncan, president of the Billings Clinic Foundation, who introduced
Swanson Tuesday morning, said Celebrate Billings didn't bring
Swanson here specifically in relation to the Nov. 7 vote on
repealing the public safety mill levy or any other election
issue.
He said Celebrate Billings has sponsored at least two
other visits by Swanson since 2004 as part of its continuing efforts
to educate local leaders on the challenges and opportunities facing
the community. For Tuesday's "community leadership economic
breakfast," Swanson was asked to talk about how Billings should be
investing in the community to encourage economic development, Duncan
said.
Celebrate Billings is made up of Billings Clinic, St.
Vincent Healthcare, Billings Gazette Communications and
MSU-Billings. The Foundation for Community Vitality joined in as a
sponsor for the Tuesday event.
Contact Ed Kemmick at ekemmick@billingsgazette.com
or 657-1293.
Published on Wednesday, October 18, 2006.
Last
modified on 10/18/2006 at 1:05 am
Copyright © The Billings Gazette, a division of Lee
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not funny anymore wrote on October 18, 2006 7:23 AM I have to agree with the Larry Swanson we
dread Billings and its non econmically sound city. The Metra should
win the prize. We recently visited the Metra and 3 Can Tango Barrel
Racing Event the Metra personel where so ill equiped to put this
function on it was cancelled Saturday and Moved to The Super Barn
Sunday. Where is the cities pride lay, must be inter city polital
turmoil and non backing of its city residence.  
Vanna White wrote on October 18, 2006 9:05 AM Dizzy presentation reminds me of Vanna
White or the monkey commercial for color xerox copies. What are the
opportunities? Just a bunch of graphs of where we have been doesnt
do much. How can Billings get more jobs, high tech jobs, expand the
university and votech? How can Billings get a Cabelas and a
competitor with Dillards? How can Billings get medical college,
medical and homeland security fed. money, health care and medical
manufacturing? It does show billings needs parks, baseball, river
park, bike trails, the river and rimrocks its tourist entry way to
Pryor, Bighorn, Fort Peak, and Beartootsh to solidify its natural
surroundings. Too many interesting but irrelevant graphs, lets get
some solutions and grow!
local wrote on October 18, 2006 9:23 AM No kidding Billings needs to do some
sustainable development. I'm not talking economic sustainability,
but some real sustainable community development. We have sold our
souls to out of state big business for too long, now we need to take
care of ourselves because refineries and chain stores aren’t taking
care of childrens our future. End these obscene industrial property
tax breaks. An industrial lot of 40 acres is taxed about the same as
a residential lot of a quarter acre. That is ridiculous.
Scott wrote on October 18, 2006 10:19 AM I'm one of those Montana youths that had
to leave the state (in 1984) for economic reasons. I love Montana
and would love to come back. The way I see it, Montanans have never
really embraced their cities. As an architectural student, I was
always dismayed at schlock that got built there; utilitarian and
boring. What Montana's cities need is a healthy dose of civic pride
and progressive thinking. People are attracted to places sometimes
for the natural landscape, but more often than not for the amenities
and aesthetic value of towns and cities. This is why places like SF,
Portland, Seattle, Boulder, etc. are so popular. If you want to draw
young people and investment to your city, make it a desirable
destination.
Missoula will be bigger than Billings in 4
years wrote on October 18, 2006
11:10 AM Missoula will be
bigger than Billings in 4 years, however, traffic in Bozeman and
missoula is horrible now and will get worse, Billings will look more
desirable as these cities choke, if we can support our elementary
and secondary schools and clean up our image, Billings will really
prosper. tomas
To Vanna wrote on October 18, 2006 11:13 AM The citizens need to start catering to
families by investing in green space, recreation for a family,
making sure they have good police and fire protection, etc. Families
want clean and safe cities. It is that simple like he said the
citizens need to invest in the city and they will come and start new
businesses.
local wrote on October 18, 2006 11:23 AM Billings and Yellowstone County need a
real sustainable community development plan. We have sold out to big
out of state industry for too long now. These corporations don’t
care about the future of our children and our communities. The tax
rates of industrial properties are obscenely low compared to
residential property tax rates. Yet take more in public services.
Look at the Yellowstone County property tax site.
www.co.yellowstone.mt.gov/gis/index.asp compare for yourself.
however wrote on October 18, 2006 11:48 AM that industrial business probably EMPLOYS
200 people so they can live in a house. so we can have 200
unemployed or 200 employed payings taxes. nothing is free in life,
we need to compete with states that have NO property tax only a
sales tax. Montana and Billings incentives are very meager at the
best. we need high paying jobs. tomas
Incredible timing. wrote on October 18, 2006 11:50 AM Come on folks…just when the city is
begging, pleading and threatening the taxpayers to get the safety
mill levy, the ball park and SD2 more money along comes an outsider
that presents just exactly what the “community leaders” want us to
hear. We constantly tell our leaders we are tired and broke and yet
they keep propping up existing and trying for more. Make no mistake
that Celebrate Billings is a group of high profile “community
leaders” that are leading the charge to pass the levees this
election and get the SD2 mill levy passed. Interesting
timing.
To: wrote on October 18, 2006 12:49 PM Missoula will be bigger than Billings in 4
years, You are living in a dream world. From 1990 to 2000 Missoula
grew at bigger percentage but Billings actually outgrew Missoula by
a few hundred people. Since 2000, the estimates have Billings
growing at an even faster pace and Missoula slowing down. Trust me,
look it up. Billings will be Montana's biggest city for quite some
time. In fact, at the current rate, it will always be the biggest.
Go ahead, look it up. I do this for a living.
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