Opinion

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Like I Was Saying

Economic Contradictions

Either the state economy has gone off the rails or it is doing better than ever

Economics have again surfaced in the debate over who should be Montana’s next governor as regional, statewide and national numbers trickled out over the last few weeks and told contradicting stories.

Either the state economy has gone off the rails because of Gov. Steve Bullock’s spending, overregulation and reckless Democratic policies, or it is doing better than ever.

In the Flathead, at least, steady growth in construction, retail, health care and tourism has appeared to offset declines in Canadian spending and the timber industry. That message was delivered last month at a chamber of commerce event in Kalispell.

“The Flathead is now growing significantly faster than the state average,” Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana, said.

Flathead Job Service recently reported over 900 open positions, the most ever, and the county unemployment rate stood at 5.1 percent in June. That’s low compared to recent years, but still higher than the statewide rate of 4.1 percent. Yet Bullock’s challenger, Republican Bozeman entrepreneur Greg Gianforte, has argued that wage growth is stagnant. And his allies pointed to recent numbers that paint a far less rosy fiscal picture.

While boosting their party’s gubernatorial candidate, Republican state lawmakers Sen. Fred Thomas, R-Stevensville, and Rep. Jeff Essmann, R-Billings, stood on the state Capitol steps in Helena last week and told reporters to stop listening to Bullock’s economic projections. This is not, they said, “morning in Montana.”

The legislators said natural resource revenues are down and, instead of the forecasted $300 million ending fund balance, the state will take in tens of millions less.

“The chickens have come home to roost,” Thomas said, according to the Great Falls Tribune.

And that would be scary, except that right after Thomas and Essmann left the Capitol steps, state Budget Director Dan Villa arrived and essentially said the two men were full of it. He argued that the state would actually have more than $300 million in reserves at the end of the fiscal year. He said the economy is growing. And he pointed out that both men voted for some version of the budget.

These descriptions – just moments apart – encapsulate this campaign for governor. Bullock’s party boasts the low jobless rate and the state’s high credit ratings from Moody’s, Fitch and Standard & Poor. And his opponents point to revenue shortfalls and a recent report from the Bureau of Economic Analysis that shows Montana’s economy, based on gross domestic product, shrunk the last quarter of 2015 and first quarter of 2016.

It’s true that the natural resources and commodities industries have suffered over the last year. And while regulation played a part, so did falling energy prices, increased competition and a stronger dollar.

For Barkey’s part, the economist said GDP is only one way to measure the state’s economy, and while he acknowledged that state revenues are weak, he at once pointed to a healthy labor market.

That reflects national trends. The U.S. economy grew a tepid 1.2 percent in the spring, which followed an even worse winter, according to the U.S. Department of Commerce. As the GOP blamed the sluggish growth on President Barack Obama’s policies, he countered with a better-than-expected July jobs report that points to a resilient economy.

Whether you believe it’s resilient or that it’s off the rails will determine the fates of Bullock and Gianforte. There’s evidence for both.