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Jore president assails Montana’s tax structure

Tax roadblocks are stifling economic growth in Montana and without a drastic commitment to change, the state’s manufacturing sector will continue to founder, the president of Jore Corp. told the annual meeting of the Missoula Area Economic Development Corp. on Tuesday.

By MICK HOLIEN of the Missoulian

"The state is your partner whether you like it or not," said Jerry McConnell, who after spending 20 years with General Electric has earned a reputation for turning around troubled companies.

He’s been at the helm of Jore Corp. since 2001 and has seen the company through Chapter 11 bankruptcy, restructuring, an eventual sale and what he predicts will be a profitable future.

However, those same things that make it difficult to attract manufacturing-type businesses to the state will continue to challenge Jore Corp., which employs 275 to 300 employees and expects a 2003 payroll of about $13 million.

"We’ve got a huge challenge to keep this business here," said McConnell to about 60 people in attendance at the Holiday Inn Parkside.

He cited the state’s personal income tax rate, one of the highest in the country, workers compensation rates and rules slanted unfairly toward employees, sometimes outrageous business property tax, excessive transportation costs and the state’s lack of infrastructure as a few examples of why it’s difficult and sometimes impossible to attract companies like Jore Corp. to the state.

McConnell also described an "agricultural bias" that slants the laws toward that sector of the state’s economy.

"The whole focus in Helena seems to be what kind of handout can we get from Washington," he said, rather than how to change a "Montana mind-set" that hinders business growth.

"Who would come here with an 11.3 percent capital gains tax?" McConnell asked. "We have to change our attitude and how we do business."

He further cited a comparison between Montana and South Dakota, which ranked well behind the state in per-capita income in 1980.

In the last two decades the two states have switched spots, said McConnell, with South Dakota’s per-capita income now standing 35th and Montana 42nd.

That’s because since 1980 South Dakota has taken such steps as eliminating personal income taxes, personal property taxes, business inventory taxes and inheritance taxes.

"It can be done here and it has to be done here," he said.

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