#MTGov Daily Rundown: Another Bullock Economic Claim Proves False

Governor Bullock has been touting strong income growth for Montana. However, as has been the case with many numbers Bullock has been emphasizing, the numbers are old. Data for 2016 from the Bureau of Economic Analysis shows that Montana's income growth is lagging behind the national average. Under Bullock, Montana now ranks 33rd.

"This week, the U.S. Bureau of Economic Analysis published its second quarter 2016 Personal Income Growth figures for all fifty states. These preliminary numbers indicate that Montana’s personal income grew by about 0.9 percent… behind the national average of 1.1 percent. Montana Bureau of Business and Economic Research Director Patrick Barkey offers some insight into the numbers.

'Montana personal income is income from all sources not just earnings, “income from all sources received by Montana households,' said Barkey. “That number, just to give you an order of magnitude, is running at about a $44 billion total for 2016. It is a pretty good measure of the states health and prosperity.'" -KGVO, 9/29/2016


Barkey notes that growth is down significantly from last year.

“What they are saying essentially is that the state has a had a few rocky quarters."  -KGVO, 9/29/2016


Amazingly, Bullock called the report "good news."

"Montana Governor Steve Bullock commented on the new figures saying, “This is great news for Montana. Thanks to the resiliency of Montana’s diverse economy, wages are on the rise, which means more money in the pocketbooks of hard-working Montana families across the state.”


Governor Bullock continues to ignore recent data showing Montana's economic difficulties. Earlier this month, the governor's office touted numbers purporting to show that Montana is number 1 in the nation for growth in median household income. The problem? It's based on data from 2014-2015?

"Montana leads the nation in household income growth last year according to the new American Community Survey Statistics released today.  Montana’s median household income grew 6.8% between 2014 and 2015, the highest percentage increase of any other state. Montana also ranked 5^th for nominal median household income growth, with a near $3,200 annual increase. All ACS figures in the report are adjusted for inflation rates." -Office of the Governor, 9/15/2016

Earlier this month, Bullock made similar claims, touting the state's Labor Report, which he claims shows that the state's economy is in strong shape. However, there is a major issue with this line of argument; he's using 2015 data. There are other issues too:

--Plus, Montana had higher wage growth BEFORE Bullock took office than we had in 2015. (Montanans experienced fairly strong wage growth in 2012, with the average annual wage increasing 3.6% to $37,093) See: Montana Labor Report, 2012

The reality is that Bullock inherited a good situation, but, due to a failure of leadership Montana's economy and fiscal situation is declining.

FROM 2013 (The year Bullock took office): "State government’s general fund surplus for the fiscal year that ended June 30 was nearly 24 percent, or $102.4 million, more than estimated, a report from the Legislative Fiscal Division released Thursday showed.

These numbers are considered preliminary because they have not yet been audited by the state legislative auditor, state Legislative Fiscal Analyst Amy Carlson said in her report.

Legislators had estimated a general fund surplus – called an ending fund balance in government accounting lingo – of $434.9 million for the 2013 fiscal year that ended June 30. However, the actual surplus turned out to be $537.2 million." -Missoulian, 9/26/2016

And even despite these figures, Montana remains near the bottom of the nation in wages.

In the group’s most recent report on tax return data by state and county, Montana ranked 49th — just above Mississippi and right below New Mexico — for wages and salaries reported in tax returns, with Montanans earning an average of $33,180 annually.

That’s more than $10,000 below the national average and almost $27,000 below the state with the highest average income: Connecticut." -Bozeman Daily Chronicle, 4/12/2015

“When it comes to the reasons people live in Montana, wages are not at the top of the list. But you might be surprised to know that the state ranks dead last in median income for millennials.  Millennials are defined by the Pew Research Center as people born between 1981 and 1997. A new study featured in Business Insider found millennials in Montana earn a median annual income of $18,000, the lowest in country.” NBC Montana, 12/14/2015

Also, more recent data from the Bureau of Economic Analysis shows that state economy has actually shrunk for the last two consecutive quarters.

"The Montana economy has shrunk for the second straight quarter as oil and gas, timber, mining, agriculture and transportation all reported losses.

The Billings Gazette reports that according to a Bureau of Economic Analysis report issued this week, drops in industry pulled Montana’s gross domestic product into negative figures for the last three months of 2015 as well as the first quarter of 2016." -Associated Press via the Great Falls Tribune 7/31/2016

For many other Montana workers, there is a great deal of uncertainty as job losses mount in our natural resource industries.

• Under Governor Bullock, Montana has lost nearly 700 jobs in the timber industry in the last year alone– leaving the industry reeling.
• Weyerhaeuser has closed timber mills in Columbia Falls
• Colstrip Units 1 and 2 are now slated for shutdown by 2022
• Montana mines are laying off workers
• Dozens of Montana rail workers have been laid off or furloughed
• Overall Montana has experienced a net loss of 2700 logging and mining jobs during Bullock's tenure, from 9,700 in December of 2012 to 7,000 in June of 2016 according to the Bureau of Labor Statistics.

Montana also faces steeply declining revenues and a depleted projected ending fund balance.

"That ending fund balance, which acts as a cushion against revenue shortfalls and unexpected spending over the state's two-year budget cycle, stood at $255 million at the beginning of July. Legislative fiscal analysts said the fund could drop below $120 million by mid-2017." -AP via the Billings Gazette, 9/7/2016