Taxpayers association, Montana Chamber ponder promoting business climate

With several changes in the state tax structure in recent years making Montana’s economic climate more favorable for business, perhaps the time has come to spend more effort promoting Montana to entrepreneurs outside the state.

By JOHN HARRINGTON – IR Business Editor

That was one topic that arose as a statewide listening tour by the Montana Chamber of Commerce and Montana Taxpayers Association stopped in Helena Thursday.

Leaders of both groups are visiting 21 cities across the state to hear the concerns of business leaders regarding taxes, worker’s compensation, workforce training and other issues. Around 25 from the Helena area offered their thoughts, which included the potential of a "Business Montana" program modeled after the successful Travel Montana tourism promotion campaign, designed to lure businesses to the state and create jobs.

"The lower business equipment tax was supposed to do it, but did we tell anybody about it outside the state? No," said Webb Brown, president of the Montana Chamber of Commerce. "Same thing with the changes that were just made to the income tax and capital gains structures. I don’t think we’re telling the story that Montana’s business climate is getting better, and we need to do that."

Lowering taxes is one thing; keeping them low is another, according to Mary Whittingill, president of the Montana Taxpayers Association.

"The other thing is predictability from the Legislature, and assurances that these changes will still be in effect a few years from now," she said.

The trimming of the business equipment tax down to 3 percent has brought the state more in line with Idaho and others in the region. In addition, a mechanism could drop the tax to zero if the real growth in wages reaches 2.75 percent annually.

"Among my membership, they think 3 percent is fair," said Ellen Engstedt of the Montana Wood Products Association. "With the possible trigger to zero, I don’t hear anyone saying that will save the mill, but they are definitely anxious about it going back up."

Webb Brown noted that when New Mexico cut taxes, the state took out an ad in the Wall Street Journal to tout the fact. But business promotion costs money, and there’s always the question of who should pay for it.

In addition to promoting tourism statewide, Travel Montana siphons lodging tax money to six regional tourism groups, allowing different parts of Montana to market themselves in different ways. The same thing could work for business promotion, as some areas of the state want to develop natural resources while others are more interested in white-collar or high-tech jobs.

"What I’m hearing from people in the tourism industry is that they think the promotional efforts for tourism work," said Betsy Baumgart of Travel Montana.

"We think we could do the same thing for business with advertising, and be able to tell the story," added Kathy Brown of the Great Northern Town Center.

Other topics aired Thursday included the rising cost of worker’s compensation and health insurance, the potential for a sales tax and the agendas of three committees empowered by the last Legislature to study property taxes and tax reform.

"This was a real good exchange, but it just scratches the surface," Webb Brown said.

John Harrington can be reached at 447-4080 or [email protected].

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