WHAT ARE STATEWIDE ECONOMIC IMPACT DISTRICTS?

The 406 Impact Districts are a locally driven economic growth tool that empowers communities to attract private investment in critical infrastructure and development projects.  The districts allow the public sector and private sectors to partner together in new ways that reduce risk to taxpayers, allow large-scale projects to move forward expeditiously, encourage private businesses to deploy their skills and expertise to benefit Montana and local communities, and expand economic opportunities for families and small businesses.

FIVE REASONS WHY THE 406 ECONOMIC IMPACT DISTRICTS MAKE SENSE

The Time to Act is Now

We are at a pivotal point in our state – economic growth is stagnating and starting to decline while communities across Montana are facing crumbling infrastructure and community needs that exceed available funds. We need to explore innovative growth strategies that turn these trend lines around and drives economic growth in a uniquely Montana way, balancing risks and rewards in a common-sense approach to development.

Read More

  • We’re at a pivotal point in our state in which we have seen stagnant and, increasingly, declining in our economic growth. Overall economic growth in our state declined from 4% in 2015 to just 1.5% in 2017.
  • We are acting now to change this trend. Other cities and states in our region — including Wyoming, South Dakota, Idaho, and Minnesota – put innovative and competitive strategies in place years ago and are reaping the benefits of their decisive action. Montana is falling behind.
    • For example, Montana is in the bottom 20% of state-invested higher education funding, and with no new tool, no arrow in our quiver, to catch up, it means asking more from students and taxpayers, or watching our universities crumble.
    • Communities across the state are struggling to attract and retain police officers and teachers, lacking the funds necessary to support these critical positions.
  • Across our state, communities have unmet needs and existing taxpayers can’t bear more burden.
  • It’s time to take our growth strategy to a new level. Innovation always feels risky, but we have studied legislation like this from around the country and learned what works and what doesn’t work. This bill is our own Montana approach to economic development that reflects our unique community values.

Taxing Residents More Isn’t the Path Forward

Montana families have been asked to give more and more in taxes at the state and local levels – enough is enough. We need to attract private investment in our state at a scale that responds to real needs in our communities – the 406 Economic Impact Districts provide that framework for public-private partnerships that mitigate risk and bring meaningful investment.

Read More

  • The primary strategy in Montana for major developments and infrastructure financing has been through taxation—both of personal home owners as well as of local businesses.
  • But after years of continued increases in taxes at the state and local level, Montana’s residents and business owners can’t take any more. The need for infrastructure investments, public school funding, and basic community safety is urgent, but people are fed up with the constant drumbeat for more taxes.
  • We need a new solution, one that broadens the tax base, attracts new investment to the state, limits the risk and cost to taxpayers, and grows our economy in a strategic and responsible way.

Keep Our Talent in Montana

Montana has a long history of saying good-bye to their graduates after high school, as more and more young people leave our communities and farms in search of higher wages and better opportunities in other states. By encouraging private investment in the core of our cities and towns, the 406 Impact Districts give us the tool we need to create opportunities for our children and to attract new families to fill projected workforce needs in the future.

Read More

  • Montana has a long and sad history of families saying good-bye to their children after high school graduation, as more and more young people leave their communities and farms in search of higher wages and better opportunities in other states.
  • Reversing this trend has challenged our state for decades, and we can’t afford to do the same old things any more, hoping for different results.
  • We have talked to hundreds of businesses around the state, and they confirm what we know to be true – Montana has a workforce acquisition and retention challenge. Our kids are moving away, and not enough people are moving in to fill the gap.
  • In Billings in particular, our community is short workers to fill jobs due to a retiring workforce, and we are not attracting and retaining the good employees.
    • Our data shows that they are going to communities that have better wages and better opportunities for career success. They are going to communities that are considered more enticing and provide a better quality living experience.
    • Billings needs to be one of those communities where high school graduates see their futures, where young families choose to put down roots and raise their children, where the economic opportunity and Montana way of life are both available to everyone.
    • Creating the statewide economic impact district development tool will allow Billings and communities around the state to provide first-class amenities to our residents, support new business growth and offer employees the jobs and competitive wages they desire, all while preserving our treasured Montana values.

Businesses Want to Grow Here

Private businesses, both locally grown and across the country, are looking to invest in communities where quality of life and growth potential combine to attract the workforce they desire. These businesses bring great jobs and broaden the tax base to fund city projects, school needs, and infrastructure development. The 406 Impact Districts will grow the overall revenue to communities, so that we can meet critical needs without more sacrifice from existing taxpayers.

Read More

  • Private businesses, both locally grown and across the country, are looking to invest in communities where quality of life and growth potential combine to attract the workforce they desire.
  • These businesses bring great jobs and broaden the tax base to fund city projects, school needs, and infrastructure development. Rather than ask current taxpayers to shoulder more burden for aging infrastructure and public safety, let’s grow the overall revenue to communities, so that we can meet the critical needs without more sacrifice from existing taxpayers.
  • The 406 Statewide Economic Impact Districts will create the incentives as well as the structure that private businesses desire to make large-scale investments in the future of our economy.

Local Control is Our Way of Life

The 406 Impact Districts create statewide economic growth to benefit everyone, while putting power back into local communities to shape their future. The vision and direction of the 406 Impact Districts is completely locally driven, so that residents can incentive private investment in a way that responds to individual community needs and provides return on investment to all Montana taxpayers.

Read More

  • Statewide Economic Impact Districts will bring new revenue to Montana in a way that benefits everyone, but the vision and direction of these districts is completely locally driven. Encouraging investment in a way that requires the private sector to take the first risk is the right way to grow our statewide economy.
  • Our goal is to empower local communities to make those decisions – too many of the decisions on critical infrastructure, public safety, education, and economic growth are being made in Helena. This legislation puts the power back in to local communities to shape their futures.

WHAT IT DOES

406 Economic Impact Districts Are…

  • An innovative approach to encouraging private sector investment in large-scale, capital intensive projects that provide a return on investment to both the developer and the taxpayer.
  • Designed to catalyze new jobs, new economic growth and new tax base through investment in both civic infrastructure and private development.
  • Capped at $250 million in public funds ($125 million state, $125 million local) over 20 years, ensuring that big projects can move forward without exposing taxpayers to unlimited risk.
  • Consistent with our Montana values – development projects are locally driven, subject to fiscal controls and safeguards, carried out through public hearings and input on projects, and time limited to ensure projects move forward.

406 Economic Impact Districts Do Not

  • Impose new state or local taxes.
  • Pay for private development, but rather reimburse the private sector for the cost of building civic assets or infrastructure.
  • Repeat the same old public subsidy model of economic development…private projects must generate new, proven, sustainable revenues for the State & local communities before any public funds can be used.
  • Benefit urban areas at the expense of rural communities – new revenues from 406 Impact Districts provide additional resources to support needs across the state.
  • Give developers a blank check – public funds can only be used to reimburse private investment in previously approved civic assets.

RECENT NEWS

FAQs

What is a public-private partnership?

A PPP or P3 is a long-term contract between a private and public entity, which provides a public good or service. These partnerships can take many forms, depending on each community’s need.  In some cases, private developers design and build a major asset or civic infrastructure component, giving operations over to a public entity.  In other cases, tax dollars may build a public asset, but private sector expertise is called upon to manage and maintain the project over time.  A P3 is a proven strategy used by states across the country to partner private organizations with the public sector to provide goods and services to the public at reduced cost to the taxpayer.

Aren’t these kinds of projects risky?

They can be. Any kind of large-scale development is risky, whether it is built by the private sector or public sector.  We have all heard of major state or local projects that are behind schedule and over-budget, with taxpayers bearing 100% of the burden for that mismanagement.  In the case of the 406 Impact Districts, we will engage the private sector to bear that risk first.  Once projects are completed and new revenues are being generated, private developers can seek reimbursement for only the public portion of the development – things like road and sidewalk improvements, streetlights, and badly needed civic facilities.

 

Any time tax dollars are being spent, it is essential that there is rigorous oversight, transparency and public input.  The 406 Impact Districts have these safeguards built in, ensure that the private sector leads and that public input is embedded at every step of the process.

Isn’t this just a big giveaway to out-of-state-developers who pocket our tax dollars and then disappear?

Not at all.  The 406 Impact Districts enable large, multi-phase economic development investments that will allow multiple developers to participate – including local companies.  After projects are completed and generating new revenues to the state, reimbursements are provided over time, as various private investment thresholds are reached. That ensures that private developers – regardless of origin – stay invested in Montana’s communities over the long-term.

Montana’s economy is growing at a slow and steady pace – no big highs or lows. Isn’t that the best approach to economic development?

When the housing market crashed in 2009 and many states and communities faced major economic challenges, Montanans were grateful that our economy was largely insulated from those swings.  Unfortunately, “slow and steady” has NOT created enough momentum to attract and retain workers, drive visitation, and grow new and existing businesses.  In many cities across the state, there is a workforce gap that is preventing local businesses from hiring and growing.  If current trends continue, Montana won’t have enough new workers to replace those who are retiring. In order to remain competitive in the Mountain States region and nationally, we need a new approach that empowers local communities to create a vision for their future.

What happens now?

Legislation is currently being drafted for introduction in the 2019 Legislative Session.  Once a bill is introduced, there will be hearings and an opportunity for public comment.  We hope legislators will move a bill forward during the 2019 Legislature, so that communities can begin implementing this statewide economic development tool.

How can I support this effort?

The 2019 Legislature is nearly halfway done, so time is of the essence.  You can message your local legislator to express your support for 406 Impact Districts here (https://leg.mt.gov/web-messaging/).  Watch this page frequently for updates and more ways to get involved.

 

We also encourage you to express your support for 406 Impact Districts and the concept of innovative public-private partnerships locally – with your city councils, county commissioners, Chambers of Commerce, and local Economic Development Authorities.

UPCOMING EVENTS

Coffee Conversations | March 8

Friday, March 8th | 7:30am – 8:30am

 

Valley Credit Union Building – Lower Level

 

Join us to learn more about the 406 Impact Districts, the upcoming statewide economic development legislation.

 

Everyone is welcome and coffee will be served.

Get On The Bus | March 15

Friday, March 15th

 

Ride the bus with other community leaders to testify in Helena on the 406 Impact District legislations.

 

Bus leaves promptly at 5:00am and will return around 6:00pm that day.