RE: Economic Development Funding

Dear Governor Martz:

It has recently come to our attention that two critical components
of the state’s economic development infrastructure are under threat. As an
on-the-ground development organization, we see this as an immediate
budgetary concern, but more importantly as another means to stymie economic
growth in the state. We often wonder if the people who constantly tout
economic development and job creation are really willing to put their money
where their mouth is. You have to develop a basic infrastructure for job
creation … it doesn’t just appear.

The Beartooth RC&D is a regional economic and community development
organization serving five counties in the Billings area. We are the
designated economic development district for the region. Our organization
has worked for many years to create a model development organization which
has the capacity to truly serve the residents of our area. We are not
growing an organization to merely assemble staff and attract attention, but
to provide tangible, genuine assistance to people. You’ll see in our
motto, "Citizens Building Stronger Communities", the very values we uphold.
It’s not just the RC&D program or the staff … it’s a partnership of people
with unique skills and capabilities that make things happen.

The proposal to eliminate the Office of Economic Opportunity by
Representative Buzzas, is clearly a political appeal with no merit. As you
quite aptly stated in a published response, this economy didn’t go sour in a
year, and can’t be fixed in a year. Anyone who believes that it can truly
does not understand the dynamics of local, state or national economies.
Change takes time!

We have had the good fortune to work with Dave Gibson and his staff
on numerous occasions. We hosted listening sessions, assisted in the
searchable property database and the cluster study review process. In each
activity, we were acutely aware of Dave’s interest in solving this economic
development puzzle and his willingness to listen to any and all suggestions.
That is a refreshing change! We firmly believe that in time, Dave’s
framework will begin to take shape and the tangible outcomes (which
politicians clamor about, but rarely work for) will emerge. Beartooth will
be happy to do whatever is needed to insure stability within that key
department of your administration.

We are also concerned about an effort to eliminate Certified
Communities funding as a means to resolve the state’s budget shortfall. As
you know, Certified Communities was developed as a means to make communities
"ready" for business development and/or recruitment. It represents key
puzzle pieces, that of knowing your existing capability as a community, the
desired outcomes for the economic development effort and a roadmap of how to
get there. In it’s 15 year existence, Certified Communities lacked one
thing necessary to make it successful … funding to get it done on the
ground. The 2000 Special Session changed that by allocating $425,000 in
annual funding to distribute to Certified Communities. It is our
understanding that this pool of funds has been offered as a means to ease
the budget deficit. We see this as a grave mistake. If we wish to expand
the tax base of this state, the only way we can logically do it is to expand
the business base in the state.

The Beartooth Area currently serves as the Lead Development Organization
(LDO) for five Certified Communities (Big Timber, Bridger, Columbus, Laurel
and Red Lodge). When this program was created in the Special Session, it
became obvious that the best use of Certified Communities funding was to
regionalize the effort and thereby, combine the funding from the five
communities. As such, we were able to create a critical mass which is so
necessary for implementing a recruitment program. Our assertion is that
business recruitment can not be done by volunteers on a community by
community basis. Otherwise funding is dispersed in small and often,
ineffective amounts. It also falls directly in line with the Office of
Economic Opportunity’s assessment that development in rural areas must be
done on a regional basis. In our area, we used the Certified Communities
funding and our local match to hire a full time staff person. This pooling
of funds and the subsequent leverage it provided has propelled our efforts
forward. You see, instead of thinking organizationally, we thought
community and as a result, provided activity to a degree which had not been
seen under the Certified Communities banner before. Our best example is
relocating Prairie Cabinets to the Town of Bridger. Through Certified
Communities and an excellent effort of the staff of Commerce, the RC&D and
the Town of Bridger, we were able to consummate the deal and bring 8 jobs
to Bridger. It may not seem like a lot, but to Bridger, it definitely is.
In fact, Bridger City Councilman Ken Gomer said in a recent council meeting,
"We like this; we finally have someone to run this program and it’s
working". We’ve done what’s been recommended for a long time in economic
development, we got communities to work together in a truly regional
approach. That’s what is all about … creating a private – public
partnership with the end result being jobs, tax base and a better economy.

The benefits of the Certified Communities program has not come to our area
without problems. Primarily, the program has become a myriad of ideas of
how to divide the pool of funds. It seems every community would like a
piece of the pie and as such, the share for each participant is diminished.
Lester Thurow’s Zero Sum model plays out nicely here. Just last year,
through a revised interpretation of the statute, driven by 37 "new"
Certified Communities applying for a piece of the pie, we were reduced from
$25,000 in annual funding to less than $7,000. We felt this was extremely
unfair to the communities that we serve, but none-the-less we resolved to
work as diligently as before. It seemed pretty shoddy treatment for the
effort we’ve put forth and results we could show to support the program.

In our program, we have established the critical mass to make Certified
Communities effective, and perhaps more importantly, we’ve established the
attitude that can make it work. The problem isn’t in the program or it’s
intent, it’s in how it is carried out. We believe the Beartooth has created
a model that makes common sense and doesn’t leave anyone out. It does
require people to work together, and what’s wrong with that?

We would ask that you strongly consider the negative impact of taking this
pool of funding. We support the concept of Certified Communities and
certainly it’s intent, but request that continued support is based upon the
ability of the funding to make a difference. It must be distributed to
recipients who can effectively run the program, not merely based on
population and a signature from the local government. Our program has made
a great start toward making a difference in the economy of our rural areas
through partnerships like Certified Communities, Neighborhood Housing and
many others. If others would emulate our efforts, you’d see the changes in
the economy that we know you wish to see. We know we are making a
difference here and believe we can in other places. The key, Governor
Martz, is to focus the program on the outcomes and not the organization that
controls it. Remember it’s the people that we serve, not the programs or
the politicians. We need to stay focused on delivering tangible service to
our citizenry. Helping them get what they want, not what we think they
want.

We think your trademark turtle becomes appropriate to our situation. Our
program has stuck it’s neck out and taken some chances and as a result, are
seen by many as the model to follow. We expect many will follow, if given
the opportunity. This is a significant issue to your administration and to
the many regions across the state. We can’t help implement your Framework
plan without the resources the state is currently providing. We’ve been
told that less than one-thousandth of the state’s budget is used for
economic development purposes. If that is true, it would seem very poor
choice to further reduce that amount. Particularly now, when every
candidate’s campaign carries the promise of economic development and job
creation. Perhaps they should put our money where our mouth is.

We look forward to your decision and that of the legislature. Please feel
free to call on us, if needed. As we have said, we are here for the people,
and believe that is the calling you have also.

Sincerely,

Tom Kaiserski Betty J. Curry
Economic Development Coordinator Executive and
Community Relations
Beartooth Economic Development District Beartooth RC&D Area, Inc.