Candidates agree on need for economic development

In a rarity by any political measure, all six Montana gubernatorial candidates agreed on something Friday: Montana desperately needs to encourage economic development.

But they all had different visions of how pull the state from its 44th place in per capita income and create a climate that attracts business and investment dollars.

By Leslie McCartney of The Montana Standard

http://www.mtstandard.com/articles/2004/05/01/newsbutte/hjjfjejijijfgj.txt

Democrat Brian Schweitzer touted small business as the economic engine and supported the idea of a "big-box" tax, while Democrat John Vincent railed against a system that allows wealthy corporations with interests in Montana to pay as little as $238 a year in taxes.

"I don’t know what their tax obligation should be, but it should be more," Vincent said.

Republican Ken Miller noted that the state’s natural resources are a "key component" in building a strong economy while Republican Tom Keating went a step further, calling for the repeal of the Montana Environmental Policy Act and the state’s siting act, as a way to encourage capital dollars and projects. He also disagreed with measures that would raise taxes.

"Taxes are an impediment," Miller said, adding that people have reached their "puke point" on taxes and fees.

Republican Bob Brown envisions that natural resources will become more sought-after because of the nation’s dependence on foreign oil and that tax reform and lowering capital gains taxes will help the state. Republican Pat Davison said that the Otter Creek tracts, a coal deposit, should be encouraged, while the state has many ingredients already in place to jump start its economy.

"We need to be in control of our destiny," he said.

The men were grilled in what was billed as a "job interview" at the invitation of the Montana Economic Developers’ Association. The candidates were asked about job creation and the revitalization of the state’s economy. About 150 people attended the all-morning session in the Thornton Building in Uptown Butte.

All the candidates agreed that economic development has been difficult, and said that the next governor will be key in courting companies and growing business.

"Jobs and economic development are the reasons I’m running," said Miller. He added that the state needs a diverse economy and envisions a governor who will take an active, persistent approach to economic development. He also thinks the equipment tax should be further lowered and that the state’s "anti-business attitude" needs to be reversed.

Brown agreed with lowering the equipment tax, but questioned whether it should go to zero, which the developers’ association opposes. He noted that in the past the tax was onerous, but eliminating it may not be in the public interest. Tax reform is important and reducing income tax is helpful in attracting business to Montana, he said.

Creating a favorable climate for business builds on itself, he said, since it attracts more business. He also doesn’t generally favor raising taxes but doesn’t want to turn down interesting ideas. "You want to try to live within your means when you can," he said.

Davison pointed out that the state is filled with Montana-made products, which should be marketed and exported to places where demands exist, like China. He also pointed out that the university system is the largest economic jewel and called for elimination of the capital gains tax.

He added that "money seeks investment" and success stories are imperative to bringing more. He believes that "extreme environmentalists" have discouraged investment in the state’s natural resource industries. He also called for more cooperation from the government.

"We need to be problem-solvers, not problem-creators," he said of the layers of bureaucracy that sometimes discourage those with ideas.

"We have only one limiting factor," Davison said. "And that’s our own creativity."

Keating shared Davison’s sentiment that extreme environmental groups are impeding natural resource development, particularly in the timber area, and the state needs to assert its rights whether it be developing its resources or ensuring water rights.

He said Montana has laws to protect the environment, but such things as the siting act and environmental policy act discourage investment. He also does not want increased taxes, even those on big box stores.

"They just pass them (taxes) down in the price tag," he said.

Vincent addressed proposed measures possibly coming before the next Legislature, including the creation of an economic development trust fund, modeled after other state trust funds. And while he generally agrees with th trust fund idea, it may not be realistic in a state that is having difficulty funding basic obligations, let alone new spending for schools and corrections.

"We might have to come up with $700 million in new revenue and it has to come from some place," Vincent said.

He added that the educational system is crucial to economic development since no companies will seriously consider a state where the schools are considered deficient.

He wants corporate tax breaks scrutinized and new ideas to solve the complex economic problems. Executing good plans, however, require a skilled governor.

"Sometimes good ideas are not enough; you need leadership to do that," he said.

In his travels around the state, Schweitzer said he is told venture capital is hard to obtain, and that health care costs are difficult for small business to absorb. He supports banding small businesses together to create a bigger pool with more insurance-purchasing power. Business people also tell him it’s difficult to find educated workers, especially in the health care field.

Schweitzer added that the state is the "only place in the Western hemisphere" that has all the ingredients for a "hydrogen economy" — or the development of hydrogen as a energy source.

He supplied a two-page position paper on the Montana Economic Developers’ Associations’ proposals.

He said one secret to luring and keeping business in Montana has nothing to do with venture capital or tax breaks.

"We have a great quality of life," he said of recreation opportunities, good schools, safe communities and access to health care.

He believes that Montana needs to do a better job of marketing itself and plans to be on the forefront of recruitment. Montana needs a business-savvy governor and he said he will be personally involved in marketing the state to business chief executives across the country.

Reporter Leslie McCartney may be reached via e-mail at [email protected].