Montana Gov. Martz rejects regents’ ideas for improving the state’s economy

Gov. Judy Martz said Wednesday that the state just doesn’t have the money to fund six new economic development initiatives http://www.montana.edu/wwwbor/EconDevWeeklyUpdate5-3-04.pdf that the state Board of Regents is promoting, even though her chief business officer is pushing the proposals.

By ALLISON FARRELL
Gazette State Bureau

http://www.billingsgazette.com/index.php?id=1&display=rednews/2004/05/27/build/local/30-regents.inc

The regents, with help from the executive branch and other state leaders, announced six economic development proposals at their meeting last week. Collectively, the proposals will cost millions of dollars and theoretically, will return millions more to the state economy.

But Martz said Montana can’t afford them.

"It’s their job to ask," Martz said of the regents at her monthly press conference. "It’s our job to say no."

Instead, Martz said the state could turn its economy around by developing its natural resources.

"We are not out of the woods financially," Martz said. "We are not solvent."

Legislative fiscal analysts predict that the 2005 Legislature will be faced with at least a $100 million deficit.

But regent Chairman John Mercer of Polson said he’s not deterred by Martz’s comments. Mercer said that once Martz has proof that the proposals will return more money to the state than they initially cost, she will likely support them.

"If we’re able to show – which I believe we can – that there will be a greater return on the investment, I think that the governor will be supportive," said Mercer, a former speaker of the House. "But no one should expect the governor to support a proposal unless the return on investment holds up under scrutiny."

Mercer said the six initiatives are designed to improve the state economy, not tax it. For example, one of the proposals calls on the state to give the university system more money to recruit out of state students. He said if the university system recruited 250 additional non-resident students at a cost of $1 million, the return to the state economy would be $50 million over five years.

"This is the kind of analysis we need to get into," Mercer said, adding that the proposals will likely be analyzed for investment return in time for the regents’ July meeting.

The governor’s chief business officer Dave Gibson said Martz hasn’t been fully briefed on the proposals. Gibson, who has spent countless hours working on the joint team that crafted the proposals, said he’ll discuss them with Martz over the next month.

"I need to spend some time narrowing in on the governor’s concerns," Gibson said. "I’m not at all surprised by her reaction. It’s absolutely her job to put together a balanced budget."

The proposals call for a $100,000 to reorganize the state’s two-year campuses, $500,000 to $1 million for e-learning programs, $200,000 to support a state office to foster business relationships between the private sector and the university system, $2.5 million annually in financial aid to students and $1 million annually to market the university system.

Regent Lynn Hamilton of Havre said she hopes the regents aren’t wasting their time in developing these proposals.

"I don’t know where she’s coming from," Hamilton said. "I certainly hope this isn’t an exercise in futility."

Gibson said the proposals should be considered part of the state’s long-term strategy for economic revival, even if they all can’t be funded in a single year.

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