Speech
Women Stepping Forward for Agriculture Conference
Remarks of Governor Judy Martz
Lewistown
10/23/2002
Thank you for asking me to join you today to outline some of my initiatives and programs for moving Montana's economy forward.
I know that "Women Stepping Forward for Agriculture" focuses primarily on advancing our agricultural economy.
The goal of my administration is to do all we can to increase the value of all our industries. This often requires a lot of tedious, "up-front" work before we can achieve a desired result, but it is the only lasting way we can increase our standard of living in Montana.
[Economic Development]
Economic Development is the top priority of my administration. Through the concerted efforts of our Office of Economic Opportunity and other agencies, we will ensure that Montana truly is ‘open for business.’
We strongly believe that developing our economy – creating good paying jobs in this quality environment that we call Montana – is key to building a better future for all our families.
As we move toward our economic development goals, we are constantly aware that it is not the responsibility of government to create economic development.
Rather, it is our responsibility to foster an environment that allows responsible, productive businesses to grow and expand right here in Big Sky Country.
The focus of the Office of Economic Opportunity continues to be two-fold. First, we must continue our transition from being a reactive state to taking a proactive approach in the way we retain, attract and grow businesses in this state.
Second, we must continue to eliminate the current barriers and build the infrastructure that will make Montana a more competitive and attractive place to conduct business.
The challenge for state government in the coming months will be to set priorities that allow us to move forward with economic development while providing the important basic functions of government such as high-quality education and protecting the safety of our citizens.
I have a vision for Montana as an economically vibrant place. To be economically vibrant, there are numerous elements to an economic strategy that must work together. Let me share with you some of what we have been doing, and what we envision for the upcoming Legislative session:
[Adding Value to Agriculture]
Agriculture is Montana's number one industry, and we are focusing a great deal of effort to make certain that it remains so. The concept of "adding value" to agriculture has several aspects, among them:
First - processing more products in Montana - we have been talking with malt producers and malt barley shippers about building new facilities in Montana. This would provide a more steady, high-value market for a major crop we produce.
Second - Diversifying our agricultural industry to include new products and new markets. I don’t know how many of you know that Montana is a leading producer nationwide of organically grown wheat.
We have just launched a new program – requested by producers – to certify organic growers and handlers for compliance with the new National Organic Standards that take effect later this month. Organic producers will pay a fee to cover the cost of the program. We expect the program to make it easier to market organic commodities overseas.
Third - Promoting Montana products. That is the goal of the new Montana's Choice marketing campaign, which involves identifying Montana products on the shelves of cooperating grocery stores.
A Montana identity also can be useful in marketing products outside our state. Wheat Montana bread and flour, Cream of the West cereals, Pasta Montana and Montana Range Meats are just a few examples.
And, with the Growth Through Agriculture program, we can help entrepreneurs with business plans and other marketing assistance to develop or expand fledgling companies.
[Proposed Agriculture Legislation]
Dealing with a very tight budget will be a major challenge when the Legislature returns in January. I also want to outline a few proposals for legislation that would affect agriculture, either directly or indirectly:
The Montana Department of Agriculture has proposed removing a "sunset" clause to make permanent a program for disposal of unwanted and unusable pesticides. As of June 2002, the program had collected and properly disposed of 200,000 pounds of such pesticides.
The department has proposed a fee adjustment to be sure we can do our job allowing the safe use of anhydrous ammonia fertilizer. We need to maintain access to the tools necessary for our producers, but do so safely.
A legal clarification would protect agricultural producers who grow seed for companies. The amendment would give producers a lien, similar to what a grain producer receives when he holds a warehouse receipt from an elevator.
The department is cooperating with our agricultural industry on other proposals, including an industry plan to provide additional fee-based support to the State Grain Laboratory in years when sample fees are not adequate to cover the lab's core expenses.
Ralph Peck is here and can answer questions or provide details on any of these issues.
[Tax Plan]
Without question, in my mind, the biggest and most important legislative initiative for agriculture is tax reform.
I am often asked why we need to change our tax structure.
Simply put, tax reform is critical for good-paying Montana jobs – jobs for you and jobs for your family.
As I’ve said, my top priority in this administration is economic development – and one of the biggest barriers to good paying jobs for Montana families is our current tax structure.
Here are just a few examples:
Right now, we have the one of the highest capital gains tax rates in the nation. Why does this matter?
Just ask any business-person – why would they invest more in Montana, when they have to pay nine percent more in state taxes on the sale of their small business or farm?
Right now, Montana has the highest stated personal income tax rate in the nation. Why does this matter?
Just ask the entrepreneur looking to stay or locate in Montana. Why would they choose to live here when respected major financial publications like Bloomberg and Kiplinger say we have the highest income tax rates?
Perception is reality.
Right now, ninety-three percent of our income tax is paid by Montanans. Only seven percent of our income tax burden is paid by non-residents. Why can’t we share our tax burden with non-residents, just like other states do?
Folks, tax reform is critical for good-paying Montana jobs and a better future for Montana families.
So, how are we going to fix the problem?
Our tax reform proposal will lower capital gains rates to encourage more investment in Montana.
Some believe that capital gains taxes only apply to the wealthy. But many Montanans have to deal with these high rates – small business owners who sell their business; farmers and ranchers who sell their farm or ranch, or retirees who sell their stock, just to name a few.
Just look at the impact on our one hundred forty thousand (140,000) small business owners in Montana – your friends and neighbors.
When they sell their business, they have to pay nine percent – one of the highest capital gains rates in the nation. Our proposal will put more money in their pocket for their child’s college tuition, for their retirement, or to reinvest in Montana.
Our tax reform proposal will lower personal income taxes an average of ten percent for all Montanans – so you can keep more of what you earn.
By sharing the burden with travelers – just like other states do, we will lower taxes on hardworking Montana families – without lowering the amount of money that goes into the state bank account.
Granted, this is a big change. And change is tough.
Folks, I don’t want our state to stay 46th in per capita income – and I don’t think you do either.
Our current tax structure hurts Montana risk-takers, job creators and investors. I am committed to bringing forward solutions to these economic barriers and challenges.
This tax plan is about more than change.
It’s about keeping our kids and grandkids here.
It’s about keeping businesses here and bringing new, high-paying jobs to the state.
It’s about a better future for Montana families.
And that’s something we can all support.
With regard to our tax plan, I would like to share with you one of the questions we are asked consistently – with the current need for budget reductions, how can we consider a tax reduction?
This is a fair question, especially because the numbers can be confusing. Discussions are currently taking place regarding our ten percent income tax reduction.
At the same time, we had to reduce budgets in the special session, and will have to implement further reductions in the 2003 Session.
The key item to remember is that the budget reductions we are required to make by statute are based on our current revenue projection shortfalls.
Due to a stagnant economy nationally, revenues did not meet legislative expectations, and now, we simply must reduce spending.
We will make the difficult – and there’s no doubt they are difficult – short-term decisions to balance our state’s checkbook.
On the other hand, our tax proposal is about making long-term, substantive change. Local, state and global economies will rebound with time. When that happens, if we have not changed the fundamental elements of our state’s tax system, we will still be at or near the bottom.
It is our sincere hope that our tax package will be one of the strongest packages ever sent to the legislature. And, one that in the end, provides the best possible chance of success; a package that will truly reform our tax system to benefit all Montanans.
[Conclusion]
Politically, we may not always agree on every detail, in Montana. But I think you will agree with me that the vast majority of Montanans want our state to be 'open for business' and competitive when it comes to encouraging new businesses to locate here.
I am confident that we’re on the right track, and together we truly can bring common sense back to government. I hope you’ll join me in these efforts.
Thank you for the opportunity to share my thoughts with you ... and for your continued work to build and enhance our agricultural industry in Montana.
Good afternoon, and may God Bless Montana.
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