HELENA – The state of Montana’s most recent economic development report paints a rosy picture – unemployment rates between 3.9 percent and 4.4 percent, more than 10,000 jobs added and wages up 3.5 percent in the last year.
But certain segments of the state – especially Indian Country – aren’t doing as well, state Sen. Lea Whitford, D-Cut Bank, said last week.
Unemployment in Glacier County, which includes the Blackfeet Reservation, last December was 9.3 percent. In Big Horn County, more than half of which is the Crow Reservation, it’s 6.3 percent.
Pointing to a map during a presentation on economic development Friday, Whitford asked one of the state’s top economic development workers: “Are you getting out into these communities?”
“How do we close that gap?” Whitford asked. “We talk about the unemployment rate and how it is dropping, but something is missing in that formula.”
Gov. Steve Bullock last month touted his office’s 2015 Economic Development Report, citing positives like job and income growth, and a good business environment. The report included success stories like Boeing buying and expanding a facility in Helena, SeaCast Inc. in Butte's joint venture with GE Aviation and an expansion at Calumet Montana Refining in Great Falls, but it made no mention of tribes or reservations.
The governor’s office said the report was intended to provide a statewide overview of economic development as it relates to specific industries – the report is organized by industry – and not call out specific areas of the state, which is why reservations weren’t in their own section.
Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana, has been traveling around the state holding economic outlook seminars and presenting the bureau's inaugural Montana Economic Report.
“We were presenting our economic outlook, and the same comment was made about our stuff,” he said. “We're looking at that and plan to react to that by doing better in the future."
He noted that BBER has done studies of tribal economies, "but they tended to be specialized reports." And the last big one "is about 10 years old."
He said statewide analyses often don't include tribes simply because of the way the data is structured – by county. "It doesn't line up with reservation lands."
Whitford said at a meeting of the Economic Affairs Interim Committee that she wants to make sure tribes, reservations and the rural part of the state aren’t forgotten in these reports.
She spoke after John Rogers, chief business developer for the state, gave a condensed presentation of the economic report generated by the governor’s office.
“When we are talking about economic development opportunities, where they are spending their time and their effort, it’s important to tap into those areas,” Whitford said. “I really think we need to be looking at some of those communities that are very high in poverty rates.”
Equity and collateral are two of the biggest hurdles to economic development on reservations, Rogers said.
Sean Becker, administrator of the Montana Office of Tourism and Business Development, said “there is a collateral paradigm in Indian Country.”
“Typically, people acquire net worth through investment in their home and borrow against their home or own land and borrow against that. That doesn’t work when your business is built on tribal land or your home (is). There is no collateral, and there is no equity.”
Rogers said the difference in commercial codes on and off the reservation also makes it hard to get loans.
“It’s difficult to finance equipment for a manufacturer or a private individual ... when you can’t go in and legally secure equipment like you could if it’s off the reservation,” he said.
He pointed to S&K Electronics Inc., established by the Confederated Salish and Kootenai Tribes on the Flathead Reservation more than 30 years ago. S&K employs about 95 people and does contract manufacturing.
Rogers also said tribal colleges can be the answer to an anticipated drop in the state’s workforce over the next five years. He said Montana could have 24,000 to 40,000 older employees retiring and leaving the workforce.
He also said that Montana is a national leader in people who work from home, an area where he said there’s “potential for our Native Americans.”
“A lot of Native Americans want to stay close to their land; that’s where they want to be.”
Whitford said part of the problem is people who live on reservations or in rural Montana might not know the opportunities are there.
“You have to apply,” she said. “People just don’t know they have the opportunity to apply.”
Whitford said she’s asked how the state’s various economic development agencies get information out to the public and whether they’re effective at getting tribal government involved. She said the regional economic development offices could routinely come talk with tribal councils about upcoming opportunities.
“There needs to be more communication out there for a lot of people,” she said. “Sometimes people just don’t know. I say look at the road map and ask, ‘Are you getting this information out into these communities?’ ”
Becker said there’s a four-person team that’s part of the state’s Office of Native American Development, a part of the Department of Commerce, that works on economic development in Indian Country.
On Friday, that team was traveling as part of a six-week tour to meet with all eight tribal councils in the state – the Blackfeet, Chippewa Cree, Confederated Salish and Kootenai, Crow, Fort Belknap, Fort Peck, Little Shell Chippewa and Northern Cheyenne tribes.
Becker emphasized that all the economic development programs offered by the state apply as much in Indian Country as they do in the rest of Montana.
He referenced the Treasure State Endowment Program, a state-funded program open to local governments that helps pay for local infrastructure projects. Tribal councils can apply for money as well, he said.
There are also specific programs targeted toward improving the economy on reservations administered by the Office of Native American Development.
The Indian Equity Fund Small Business Grant is meant to help bridge the equity gap Rogers referred to and provides money to be used by the grant recipient as equity. Up to $40,000 is available under that program.
The team also will meet with the banks that serve Indian Country, “to make sure when they are considering loans to Indian-owned businesses that there are opportunities for the Montana Department of Commerce to shore up that financing profile.”
Becker called collateral a “fundamental gap in finance for Native American businesses on a reservation.”
The Native American Collateral Support program can put in a deposit for the bank to hold in place of traditional collateral like land or a home, Becker said. The Big Sky Trust Fund Job Creation Grant can offer reimbursement on new hires so the business can have accounts receivable on their balance sheet. Workforce training programs can guarantee employees with the necessary skills.
Though many of the statewide programs have been around for years, some of the programs specific to Indian Country are new, Becker said. He said they will help increase the net worth of both businesses and people on the reservation, but it’s not something that will happen overnight.
“These programs are small compared to the underemployment epidemic in Indian Country,” he said. “But they have the full support of chief elected officials, full support of the Montana Legislature, all of the resources of state government.
“This is the first time we’ve ever had a collateral support program, the first time we’ve ever had Native American Business Advisers. We’re making tremendous headway.”