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Economic Outlook for 2013: Optimism Abounds

By Beacon Staff

At a Kalispell luncheon last week, representatives of six Flathead Valley industries – ranging from health care to logging – provided a 2013 economic outlook and discussed their top priorities for the upcoming Legislature.

There was general agreement that the economy has been getting better and should continue getting better next year. And the six panelists made clear they’ll be keeping an eye on the Legislature to promote their industries’ interests and further advance this trend of economic growth.

Perhaps nobody will be watching the Legislature, and Congress, more closely than health care officials, who are waiting to have several significant questions answered.

The Legislature has to decide whether to expand Medicaid, while the failure of the federal government to solve the fiscal crisis could lead to a 2 percent cut to Medicare and substantial cuts in physicians’ payments.

At the state level, Tony Patterson, chief administrative officer and general counsel at Kalispell Regional Healthcare, said he would like to see the Legislature approve a multi-state compact to expedite nurse relocations and address tort reform.

Patterson described the industry’s crystal ball as “cloudy.”

“As everyone knows, the whole industry is right in the bull’s eye,” he said of health care reform. “We’re going to be very alert and proactive on our side.”

The Dec. 11 Kalispell Chamber of Commerce luncheon was held at Red Lion Hotel and sponsored by Valley Ford. The panel’s moderator was Jim Ness, chairman of the chamber’s government affairs committee. In addition to health care, there were panelists representing construction, manufacturing, real estate, tourism and wood products.

Montana Logging Association Executive Director Keith Olson, who has witnessed his industry suffer major blows in recent years, offered a cautious, and wry, brand of optimism. His opening remark was four words: “Timber: less bad. Questions?”

Olson went on to say that he has seen statistics predicting substantial increases next year in both lumber prices and construction. He also cited a report showing that the state’s lumber prices, mill production and mill employment were up between 19 and 26 percent – but noted those figures are coming off record lows.

And a new wood chipping facility in Bonner promises to take in 9,000 loads of pulp logs next year, which Olson said is the “equivalent of starting up Stoltze Lumber.”

“I’m very much encouraged,” he said of the Bonner facility.

Olson said his industry typically plays “defense” in governmental affairs. Specifically, he would like to see the Legislature eliminate the business equipment tax and address workers’ compensation.

Tia Robbin, executive director of the Northwest Montana Association of Realtors, said she hopes the Legislature clears up some issues in the subdivision and platting act and said she’ll also be curious to see what happens with the Confederated Salish and Kootenai Tribes’ water compact.

Robbin is optimistic that the positive gains in her industry from 2012 will extend into 2013. She said land and residential sales are both up.

Representatives fill the House Chambers during the 62nd session of the Montana Legislature in Helena in 2011. – File photo Lido Vizzutti | Flathead Beacon

“We’re seeing homeowners who were hesitant to put their homes on the market saying, ‘Okay, I’ll do it now,’” she said.

Charles Lapp of the Flathead Building Association said officials in his industry, as always, are interested in any legislative action regarding building codes, zoning and land-use issues, as well as property taxes. The issue of exempt wells is also “near and dear to our heart,” he said.

Chris Hyatt, representing manufacturing as president of the Montana Firearms Institute, discussed a number of employee-related topics that could come up at the Legislature. Any legislation dealing with right-to-work and the non-compete clause would be of interest, as would unemployment insurance and workers’ compensation.

Diane Medler, executive director of the Kalispell Convention and Visitor Bureau, said after a strong year in 2012 she is optimistic about the upcoming year. She said October saw a 10 percent increase in hotel occupancy and June saw a 9 percent increase over the previous year. Canadian visitors continue to play a significant role in the local economy.

Medler said tourism officials in the area have made a concerted effort to attract events, conventions and meetings to the Flathead, and in turn boost the number of visitors. Echoing Olson, she said the tourism industry generally takes a position of defense at the Legislature, including protecting the bed tax structure.

As an example of the kind of events the valley is attracting during the shoulder seasons, Medler said she’s excited about the Spartan Race in May.

“We believe we’re going to be able to drive visitation to our area, particularly in those traditionally down times,” she said.