MONTANA BUSINESS QUARTERLY

Volume 43, Number 1, Spring  2005

An Overview of Montana Taxes

by

Douglas J. Young

Tax reform is an ongoing process in Montana – not a one-time event. This article describes Montana’s current taxes, how they compare with other states, and important changes since 1990. Some of the most divisive political issues of recent years have concerned taxes. How, in fact, has Montana’s tax structure been changed?

2005 U.S. Economic Outlook

by

Paul E. Polzin

The fits and starts that followed the 2001 recession and 9/11 terrorist attacks appear to have ended, and the U.S. economy is in the midst of a solid – if unspectacular – recovery. Higher interest rates and oil prices and the end of tax cuts will likely lead to somewhat slower GDP growth in 2005. Even a major economic shock, however, would probably not derail the recovery.

Another Slow Year for Montana Tourism

by

Norma P. Nickerson, Jim Wilton, and Melissa Dubois

While domestic travel in the United States increased by nearly 3 percent in 2004, nonresident travel in Montana remained flat from 2003 to 2004. It is unclear why Montana is not experiencing the same increase as the United States. Speculation suggests a number of possibilities that are included in this article.

Health Care Costs

by

Steve Seninger and Daphne Herling

Total health care spending in Montana is estimated at $4.6 billion in 2004, which represents an increase of $300 million, or 7 percent, from the previous year. Montana’s increase in health care spending mirrors the national growth, with total U.S. spending on health care now up to $1.8 trillion. The increased cost associated with higher health care spending affects affordability for consumers and employers. This article examines rising health costs and the impact on Montana workers and families.

Montana's Manufacturing Industry

by

Charles E. Keegan III, Thale Dillon, and Robert Campbell

Following three years of declining production, sales, and employment, Montana’s manufacturing industry saw improvement as 2004 progressed. The value of Montana’s manufacturing output increased by more than $500 million in 2004; however, employment was essentially unchanged.

Strong Economic Growth Continues in Montana

by

Paul E. Polzin

Ever the maverick, Montana continues to show economic trends decidedly different than those seen nationally. Montana’s economy simply does not show the same trend as the U.S. data. Montana did not feel the impact of the 2001 recession or the economic bust that followed the terrorist attacks. Through most of 2001, 2002, and 2003, the Montana economy outperformed the U.S. economy.

Outlook for Agriculture

by

Kevin McNew

In Montana, wheat production this past year was up 21 percent because of good yields. After years of persistent drought, beneficial rains during the wheat-growing season helped push Montana’s yields to their highest level in nearly a decade. An isolated case of BSE sharply reduced the cattle export demand and U.S. commercial beef production in 2004 will average about 6 percent lower than 2003.

Montana's Forest Products Industry

Current Conditions and 2005 Forecast

by

Charles E. Keegan III, Todd A. Morgan, Jason P. Brandt, Francis G. Wagner, and Keith A. Blatner

Prices for most wood and paper products were up substantially in 2004 relative to 2003. Lumber prices mobbed from near historic lows in early 2003 to near record highs in the third quarter of 2004. In 2005, prices for lumber and other wood products may be somewhat lower than 2004 levels, but prices are expected to remain well above average levels for the last several years.