Montana Articles

Mid-September Open Post Weekend

9/16/2016

Got the Gary Johnson sticker on the car now

This is an open post where you can discuss whatever you want.

Perhaps you want to talk about presidential politics…the governor’s race…the oil pipeline protests in North Dakota…daily struggles and frustrations…

53 days to go...it's getting close

You can talk about all that and more.

First, however, I’d like to pose a question.

Montana income tax revenues are down $45 million, oil and gas revenues are down $20 million, natural resource revenue is down $11 million, corporate tax revenue is down $61 million.

We thought we’d have $314 million by June of 2017 but now it looks like we’ll have $109 million.

And that’s when we brought in $2.1 billion in revenue for the past year.

We could argue over where the money’s going, and 150 people will do that a lot starting in January.

Instead I’ll ask…

How can Montana generate more revenue?

6 Comments

CWH

9/16/2016 01:19:52 pm

Time to think a little harder about some of the issues you've been writing about lately Greg. The economy will never improve as long as we keep losing good jobs in resource based industries like coal/mining and pipelines/oil & gas, both of which you appear to be against. We used to mine gold to back up every $ we printed. No more.

When resource based jobs are gone, you are left with tourism and service industry jobs. Neither produce/introduce a single cent of "new" wealth into our economy. It just allows for the transfer of a piece of paper from one hand to another. When you run out you simply print more. As long as people accept that piece of paper at face value things move along smoothly but every time you print more you erode its buying power to individuals. The eventual result is a loss of confidence in the currency. That's when we find ourselves in big trouble. We've been on the edge for several years (decades?) now.

You've made several comments about the insignificance of the loss of a few jobs at Coalstrip. Those are good paying jobs and, as a result of the shutdown, could lose their homes. And it's not only the people directly affected. How about the stores where they will no longer buy groceries. The gas stations and shops where they used to get their cars worked on. How about the restaurants in the community where they take their kids for a burger now an then etc. That should matter to you.

As for pipelines and oil and gas, have you you thought at all about how you and your family are affected by shutting down mines, drilling, pipeline construction etc? I think not. Most electricity in this country is generated by nuclear plants and those fired by natural gas and coal. I doubt you have a clue about where or how the electricity you use for cooking, heating, lights, charging you cell phone and keeping your computer alive comes from. The only thing that matter to most people is that when they flip a switch, something works. Beyond that they could care less.

If you use gas or electricity in your home, pipelines and power lines have to cross the backyards of thousands of other people in order for you to enjoy the conveniences you want for your family. What if those people had chosen to stop those project. Where would that have left you? Think about it.

Greg Strandberg

9/16/2016 01:36:53 pm

I feel that wind and solar and other renewables could replace coal/mining and pipelines/oil & gas, but we never seem to get much further than the talking stage. I don’t see why those jobs couldn’t pay as much as the current resource jobs.

How can tourism and service industry jobs create new wealth in our economy? Maybe we should talk about that more, and not just the sales tax angle. I’m a big proponent of unions for these jobs, but no one else talks about it.

The Fed and printing money, as well as our leaving the gold standard, are all big problems.

I feel the people at Colstrip could care less if they’re mining coal or wind – they just want the same paycheck every two weeks. We could switch our electrical plants over from coal to renewables, but again, we never get past the talking stage.

Brian Schweitzer outlined how we could make the transition in that energy book he put out last year.

Thanks for the comments.

nemo

9/17/2016 09:32:33 am

Excellent post CWH. I think Mike Hopkins raises some valid points on the resource industry in the Missoulian (sec. B) right along your line of thought.

Questioning the significance of another's job is of course a slippery slope. One must be willing at some point to open their own occupation up to the same scrutiny no? Not a pleasant thought eh? Guaranteed those folks down in Colstrip think they are significant and their lives matter. Not unlike the loss of Smurfit here after 30+ years of hammering on the timber industry. I don't think Frenchtown will ever be the same.

I know the Bakken is an extreme example but look at what happened to the service industry jobs there. Could the answer be as simple as prosperity for all and not government intrusion into the marketplace (i.e. minimum wage). Can a rising tide float all ships?

As for generating more revenue in Montana maybe the time has come to make some hard choices about how we spend the money we do have and looking at ways to cut spending. Taxes do not create wealth.

Excellent thoughts from you both to get the old gray matter warmed up.

Greg Strandberg

9/17/2016 09:49:17 am

In 1979 Arnon Gutfeld wrote a book called Montana's Agony: Years of War and Hysteria, 1917-1921. It was put out by the University of Florida.

Gutfeld put Montana’s economic situation quite succinctly while writing about the state’s politics during the 1910s, saying that, “like most of the states of the region, it had developed a colonial economy.” (Gutfeld, p 7)

Montana has very little manufacturing today and relies on a value-added economy because of decisions made by the Anaconda Company in 1923. . In that year they bought the American Brass and Foundry Corporation, which was located in Connecticut and New Jersey. It was clear that corporations would take our resources and finish them somewhere else.

So we rely on resource extraction, with lots of government and finance jobs, and over the past generation, a lot more service industry jobs.

In Montana we don’t make things and we don’t sell things. We just pull stuff out of the ground. When it comes to timber, 80% is processed out of state.

In 1992 UM history professor Harry Fritz told us that if we want to get serious about manufacturing in Montana we need “applied research, technology transfers, market and feasibility studies, business plans, and capital formation.”

None of those have come about in any significant way in the 15 years since he wrote that.

Even as far back as ‘92, however, Fritz saw that our tourism industry would come to rely on a strong telecommunications infrastructure...which we still lack. How many tourists pass us by for neighboring states, and just because they can get better internet access?

Let’s also not forget that the ‘transfer industry’ is an industry in itself in Montana these days.

This consists of “pensions, retirements, rents and royalties, and Social Security payments – all new money coming into the state and spent here by residents.”

nemo

9/17/2016 10:37:38 am

Missoula of course being a shining example of how to inhibit jobs with any real earning potential. Is it undue influence by the wealthy earth muffins who relocate here and want to keep MT as their personal utopia? I just don't know Greg.

Greg Strandberg

9/17/2016 10:43:26 am

I'll be interesting to see how Missoula ends up over the next few years.

We're about $500 million in debt with all the long-term bonding we've done.

We have no industry anymore, we're inviting in tons of refugees, we give tax handouts to a select group of developers and consultants, and the university is doing about as badly as it has in a generation or more.

And yet people keep coming here.

Why...for what...and how on earth are they making a living?

Perhaps I'm just clueless, however, and have no real idea of what the situation truly is.

Mid-September Open Post Weekend

Leave a Reply.

MT Book 7

Montana Blog

Popular Posts

Categories

Archives

My MT History Books

My Montana Novels

My Montana Short Fiction

Mid-September Open Post Weekend

Leave a Reply.

MT Book 7

​Montana Blog

​Popular Posts

Categories

Archives

​My MT History Books

My Montana Novels

My Montana Short Fiction

Montana Blog

Popular Posts

My MT History Books