Chamber of Commerce

Well said:

State’s ‘open for business’ message could be much clearer By RUSS SPIKA

With the 2007 legislative ses­sion in the history books, let’s take a moment to see how the business community fared. If we truly are “open for business” as a state, it is important that our leg­islation reflect that attitude.

A number of positive changes were made for economic devel­opment. The state is starting to reform our broken workers’ compensation system, unem­ployment insurance rates will go down marginally, funding was increased for work-force training, and the state may see new energy development.

However, this last legislative session, compared with other sessions in recent memory, fea­tured a strong, constant onslaught on business that tar­nishes our state’s reputation on economic issues.

The business community was able to defeat many anti-busi­ness, anti­investment pro­posals from the Montana Department of Revenue. Under the guise of going after “out-of-state tax cheaters,” the DOR’s legislation would have negatively impacted all businesses in our state, not just tax cheaters. I’m not just saying that as a businessman — I’m also saying that as a licensed CPA. Montana should vigorously pursue known tax cheaters, but not at the expense of law-abiding taxpayers.

If passed, the DOR’s bills would have lengthened the cor­porate tax statute of imitations on Montana businesses, forced Montana businesses to do the tax-collecting work of the DOR, and raised taxes on businesses in Montana. No, that was not a misprint.

The administration had numer­ous proposals to raise taxes on business during a time when our state saw record budget surplus­es. New taxes were proposed on real estate investment trusts, unused gift card money, and the DOR is also looking to double tax wireless companies. Are tax increases really the answer when businesses and taxpayers just overpaid a billion dollars to Hele­na? Are higher taxes on cell phone companies prudent for rural Montana where reception is still spotty?

Additionally, Montana busi­nesses will see next to nothing in tax relief coming out of the state’s billion dollar general fund surplus.

In fact, the administration and several legislators opposed busi­ness equipment tax relief because the state could not “pay for” the relief unless it raised rev­enue elsewhere. They resisted relief that was not tied to the DOR’s new tax schemes that would hurt Montana small busi­nesses.

If you consider that increased business activity was the primary reason for the surplus in the first place, it is sad to find out that nothing will be coming back to encourage growth, higher wages and increased benefits for work­ers. The big winner this session is the public sector, not the private sector. As a result of increasing general fund spending out of Helena by close to 40 percent in the past few years without returning overpaid taxes on a noticeable level, I worry about the private sector’s ability to keep up.

While increased spending on education and corrections were overdue, double digit growth across-the-board may spell disas­ter for Montana’s ledger down the road.

Just saying that our state is “open for business” is hollow when businesses are constantly playing defense in Helena. If we are interested in long-term, sus­tainable growth that allows our children to stay and work in Montana with good-paying jobs, we have to send a clearer mes­sage welcoming business and investment in our state.

Russ Spika is a practicing CPA in Lewistown and chairman of the Montana Chamber of Commerce.


Anonymous said...

Refresh my memory please: Why did education spending needed to be increased instead of bringing Montana in line with parental rights to choose and school vouchers?

Anonymous said...

"Are tax increases really the answer when businesses and taxpayers just overpaid a billion dollars to Hele­na? "

Evidently So!