Coming Soon! New MPI Studies

Research Abstracts

The Montana Policy Institute has undertaken an ambitious research agenda over the past two years heading into the 2013 Legislature. Our research is designed to lead the charge in reforming budgeting, spending, education, legal, labor, health care, and energy policy from the perspective of limited government, free enterprise, and individual liberty and responsibility. MPI will feature these studies at its biennial legislative in Helena on November 16-17, 2012.

Budgeting for Results: A Fiscal Roadmap for Montana

By Dr. Barry Poulson and Dr. John Merrifield, MPI Fellows

Release: October 2012

Abstract: The 2012 study serves an update and expansion of our 2010 “Budgeting for Results: A Fiscal Roadmap for Montana.” The updated and expanded study consists of the following. Part I updates the 2010 analysis of the structural deficit that has emerged in the state budget. Part 2 outlines a priority based budgeting approach for the state. Part 3 identifies off-budget spending that is contributing to the structural deficit. Part 4 analyses the extent of the unfunded liability in state and local public pension plans while proposing options for reform. Part 5 provides a deeper look at the continuing accumulation of unfunded liabilities in the Other Post Employment Benefits plan in Montana. Part 6 explains how perpetually increasing costs in Medicaid are crowding out other budget priorities. Part 7 details the distribution of the tax burden in Montana and sets the stage for Part 8, which simulates revenue projections and economic growth with changes in certain tax policies.

 

State Spending Growth and Future Deficits: How Montana Went from Surplus to Shortfall

By Curt Nichols, MPI Fellow

Release: December 2012

Abstract: The upcoming release is an update of the original study released in 2010. Despite occasional surpluses, the looming structural deficits in Montana’s budget are a cumulative and predictable result of years of spending decisions and state budgeting practices. The primary cause is a large increase in ongoing spending enabled by rapid revenue expansion over several biennia followed by a cyclical drop in revenues. Contributing to this problem is a budget process that pays too little attention to efficiency or effectiveness, fences off significant dedicated revenues to earmarked appropriations, and that allows delays in addressing unfunded pension liabilities.

 

The Montana Supreme Court v. the Rule of Law: A Barrier to Prosperity

By Rob Natelson, MPI Fellow

Release: October 2012

Abstract: There is a consensus among researchers that adherence to the rule of law is crucial to vigorous economic growth. Montana’s economy has lagged the economy of most of the United States since the 1980s, and this MPI study explains one reason why: The Montana Supreme Court, the final authority in the state on most legal questions, has not honored the rule of law. Its failure to do so has harmed wealth and job creation in Montana. In this study, Professor Rob Natelson, the Institute’s Senior Fellow in Constitutional Jurisprudence, first examines what it means to honor the rule of law. He identifies five components: clarity, stability, notice, fairness, and restraint. He then shows how the rule of law is important to a state’s economy. The American Founders understood this, and Professor Natelson cites provisions they inserted into the U.S. Constitution to protect the rule of law. He then explains why the Montana Supreme Court is more influential within state boundaries than most tribunals of its kind, giving it a significant impact on the Montana economy. The heart of the study is its comparison of rule-of-law standards with the Court’s actual practices.

Education Funding Reform

By Curt Nichols, MPI Fellow

Release: October 2012

Abstract: Montana’s system of school funding represents a long legacy of elements that have been added over the years with some features dating back to the first half of the previous century. Court action in the late 1980s lead to the most extensive recent reform in school funding with further changes added in 2005 following another court action. The 2005 changes are more of a pasting-on of several additional elements. The present day result is a complex set of entitlements, calculations and regulations. This paper will attempt to describe the process of determining state aid, placing limits on the general fund budget and the district’s process of setting the budget within these limits and finally setting the property tax levy on taxpayers of the district. Some simplification will be required.

 

Montana Pig Tales: Wasted Treasure in the Treasure State

Release: November 2012

Abstract: This book is a follow up to the 2010 Montana Pork Report. It employs the same guidelines used in the 2010 installment to determine if spending is wasteful are whether a program or budget item: 1) Costs Montanans a significant amount more than the national average; 2) Was the result of poor planning; 3) Clearly is meant to benefit specific classes or individuals at the expense of all others; and 4) Does not directly help Montana or does something that is not government’s job to do. Taxpayers, legislators and the governor will draw their own conclusion on whether these programs and projects are essential or wasteful, but even if there is disagreement, at some point a consensus must be reached.

The Limits of Wind Power

By William Korchinski, Reason Foundation; Project Director: Julian Morris, Reason Foundation

Release: October 2012

Abstract: Environmentalists advocate wind power as one of the main alternatives to fossil fuels, claiming that it is both cost effective and low in carbon emissions. This study seeks to evaluate these claims. Existing estimates of the life-cycle emissions from wind turbines range from 5 to 100 metric tons of CO2 equivalent per kilowatt hour of electricity produced. This very wide range is explained by differences in what was included in each analysis, and the proportion of electricity generated by wind. The low CO2 emissions estimates are only possible at low levels of installed wind capacity, and even then they typically ignore the large proportion of associated emissions that come from the need for backup power sources (“spinning reserves”). Wind blows at speeds that vary considerably, leading to wide variations in power output at different times and in different locations. To address this variability, power supply companies must install backup capacity, which kicks in when demand exceeds supply from the wind turbines; failure to do so will adversely affect grid reliability. The need for this backup capacity significantly increases the cost of producing power from wind. Since backup power in most cases comes from fossil fuel generators, this effectively limits the carbon-reducing potential of new wind capacity.

 

How Business Friendly Are Montana’s 25 Largest Cities?

By John Hill, President, American Indicators

Release: September 2012

Abstract: In order to excel in an increasingly competitive global marketplace, Montana must be as attractive as possible to businesses wishing to relocate to or expand in the state. There are numerous state level comparisons of Montana’s business friendliness to inform policymakers in Helena. The same sort of report dedicated to comparing major cities and towns in Montana simply doesn’t exist. Cities and towns are the real engines that drive the statewide economy and Montanans should consider how they compare against each other with respect to economic, social, and educational factors attractive to businesses. MPI and American Indicators have collected data on Montana’s 25 most populous incorporated areas and ranked them based on criteria that both ensure business success and protect the entrepreneurial spirit. The three categories ranked are Economic Vitality, Business Tax Burden, and Community Allure.

 

Montana Public Employees Fare Better Than Private Sector Counterparts

By Glenn Oppel, MPI Policy Director

Release: October 2012

Abstract: A recent analysis for the Montana Policy Institute and other statewide policy organizations, conducted by economists William Even of Miami University and David Macpherson of Trinity University, measured state and local government employees’ pay around the country. It found that the “premium” – the advantage in total compensation for being a public employee rather than a private-sector worker – is eight percent in Montana. The study used regression analysis and controlled for key factors such as educational attainment, sex, age, race, disability, and work experience. Total compensation included wages, paid time off, health insurance, retiree health coverage, other benefits, and pension costs.

 

MPI Issue Brief: Teen Unemployment and the Minimum Wage

By Glenn Oppel, MPI Policy Director

Release: August 2012

Abstract: The Montana Policy Institute released updated research data on the unemployment effects of minimum wage increases on working-age teens in Montana. The unemployment rate for working-age teens has nearly doubled since 2006 and fewer are actually entering the workforce. Controlling for the job-killing effects of the recession, the research estimates that nearly 1,200 jobs were lost for Montana teens because of state minimum wage increases from 2005 to 2011. Unemployment rates for teens are likely to rise in coming years as the recession persists and the state minimum wage increases annually.

 

MPI Issue Brief: Pitfalls of the Patient Protection and Affordable Care Act for Montanans

By Glenn Oppel, MPI Policy Director

Release: June 2012

Abstract: The Patient Protection and Affordable Care Act (ACA) was signed by President Barack Obama on March 23, 2010. If and when it is completely implemented, the ACA stands to radically change the landscape of the health care market by violating basic liberties protected by the U.S. Constitution, undermining any vestiges of consumer-based care, putting more pressure on beleaguered national and state budgets, stymying economic recovery, and exacerbating many of the structural weaknesses that inflate costs and diminish access and affordability in the existing health care market.

 

Economic Impact of Montana’s Renewable Portfolio Standard

By David Tuerck, Paul Bachman, and Michael Head

Release: January 2011

Abstract: In 2005, Montana’s Legislature established a statewide Renewable Portfolio Standard (RPS) mandating that selected renewable energy sources account for 15 percent of retail electric sales by 2015, with a phase-in period beginning in 2010. The negative economic and social impacts of this mandate on Montana will be significant in terms of lost jobs and lower disposable incomes. In addition, the desired environmental impacts will not be achieved as firms with high power usage will simply avoid or leave Montana in favor of areas with lower electricity prices and potentially lower environmental standards, taking their jobs and prosperity with them.

 

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