I sometimes find myself shaking my head when I hear candidates talk about creating jobs, particularly if they are discussing cutting taxes. That isn’t really how it works. Government and politicians don’t make jobs. If they are doing it right, they are cultivating an environment where entrepreneurs want to start businesses and existing businesses have what they need to continue to grow. They are supporting economic development. Cutting taxes doesn’t necessarily achieve the goal, if it means poorly maintained infrastructure, underfunded police departments and schools that can’t compete. If cutting taxes means leading with a message of scarcity and no vision for the future, well that isn’t really leading, is it?
Entrepreneurs want to locate their businesses where safety and good public schools are a given. After all, where does a well-educated workforce come from, if not your local schools? And high taxes aren’t really an issue in Montana. The non-partisan Tax Foundation rates Montana’s business tax climate No. 5 in the country. Wyoming is No. 1. South Dakota is No. 3.
While Wyoming’s No. 1 tax-climate ranking is interesting, infinitely more intriguing is the economic development program it just unveiled. Wyoming Gov. Matt Mead and South Dakota Gov. Dennis Daugaard were in Billings discussing economic development with Montana Gov. Steve Bullock last week. The discussion centered on Wyoming’s 20-year plan, ENDOW. ENDOW stands for Economically Needed Diversity Options for Wyoming. Seventy percent of Wyoming’s revenue is from taxes on natural resources with a typical family paying $3,050 in taxes and receiving $28,750 in services. With the recession and the wild fluctuation of commodity prices, it is easy to see why Wyoming might need to diversify its economy and tax structure.
The ENDOW Executive Council recommended a focus on infrastructure; specifically, expanding commercial air service and improving access to broadband. Wyoming has good reason to be concerned about broadband. U.S. News ranked it 48th nationally for internet access and speed. Montana was 50th. North Dakota, South Dakota and Idaho were No. 2, No. 5 and No. 6. North Dakota is No. 2 and Montana is No. 50! What is that all about?
ENDOW’s second area of focus was education and workforce training. Business leader Bob Dunnof closed the discussion with the governors recognizing that all three states are investing in the future: “The natural resource of tomorrow is bright minds.” Old school economic development was about subsidizing large manufacturers – forward thinking development is about creating new economies where employees want to live because availability of quality workforce is driving business growth and the creation of wealth. Those bright minds choose to live where there is openness to diversity, creative thinking and a willingness to take risks.
A bright spot for Montana is that we retain four out of every five of our university graduates. Wyoming only keeps two of five. South Dakota has implemented a successful $50 million scholarship program for students enrolling in one- and two-year programs in trades that South Dakota needs – nurses, welders, and machinists.
Wyoming’s third area of investment was entrepreneurial development. In 2018 the Wyoming Legislature passed bills for $15 million for commercial air service improvement, $3.5 million in workforce development, $10 million for broadband, $6 million to support research and innovation, and $5 million for developing Wyoming’s entrepreneurial ecosystem.
There is no shortage of examples both within Montana and from our nearest neighbors about how to prepare for the near future. Montana has some very good economic development programs, which are coming up for renewal by the Legislature in 2019. We are already doing with $3.5 million some of what Wyoming proposes to do and our Legislature had the good sense to create in 1976 the Coal Severance Tax and in 2005 the Big Sky Economic Development Trust Fund to help diversify our economy from complete dependence on natural resources. However, rural communities across the country now have the ability to diversify thanks to new technology, but only a plan that embraces growth and investment will create the environment where both entrepreneurs and a well-educated workforce will choose to call home in the future.
Kim Morisaki is the business development director at Montana West Economic Development, economic gardener, strategic doer and entrepreneur enthusiast.