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Associated Press and Missoulian State Bureau Candidate would try to cut taxes, increase efficiency

The most effective solution for improving Montana's economy is for government to abolish barriers to growth and not to launch a handful of new programs intended to spur development, says Rob Natelson, a Republican candidate for governor.

That is the philosophy behind his plan for economic development, which he unveiled in a news release Monday. He is the last of the five gubernatorial candidates to outline ideas for ending the state's economic malaise.

But Natelson, a law professor at the University of Montana, said his plan differs from the bureaucracy-heavy proposals of the other candidates.

"It is time for Montana to change course," he said. "It is time for Montana to adopt tried and true solutions that work: Cut taxes, increase the efficiency of basic programs, reduce harmful regulation, protect property rights, return the lion's share of the state budget surplus to the people, and otherwise clear barriers to prosperity in Montana."

Natelson said the approach to remove barriers offered by running mate, state Sen. Tom Keating, R-Billings, doesn't extend special privileges to favored companies or industries like the plans offered by his opponents and their running mates.

  • Natelson said he proposes a plan that:

  • Cuts taxes that discourage growth.
  • Reduces the general burden of government.
  • Improves the quality of basic services at the same or lower costs.
  • Clarifies and refines property rights.
  • Improves the judicial system.
  • Reduces barriers to competition such as anti-competitive regulations.
  • Reduces barriers to communication and transportation by improving physical public works.

He said the other candidates for governor - Republican Judy Martz and Democrats Mike Cooney, Joe Mazurek and Mark O'Keefe - instead are emphasizing a programmatic approach that relies mostly on government programs of spending and highly targeted tax incentives. Their programs would give the government more power to direct the private economy and they advocate at least some economic planning, more direct intervention into the economy and more funding of existing programs.

This programmatic approach advocated by his opponents, Natelson charged, does the following:

  • Gets the state into marketing and "smokestack chasing."
  • Subsidizes favored companies, industries or activities with free or below-cost land, employee training, grants and loans.
  • Grants highly targeted tax privileges.
  • Pours taxpayers' funds into existing programs without insisting on structural improvements in those programs.

"If this sounds familiar, it is because the programmatic approach has been a feature of Montana politics for many years," Natelson said.

"Traditional politicians like the programmatic approach because it gives them access to more resources, more ribbon-cutting opportunities and more visibility," Natelson said. "Particular programs may have highly publicized successes, as when political leaders manage to recruit and entice a large community to their community."

He said the programmatic approach has been used extensively by politicians in Butte-Silver Bow, who make great claims for their programs.

"But most people want to know which approach works better, not for the politicians, but for the public as a whole," he said.

He cited research from independent investigators who have found little evidence that the programmatic approach works and some evidence it can cause real harm. Natelson said there is "overwhelming evidence" that removing barriers "works very well indeed."

Natelson cited a study by Richard Vedder, whom he called probably the nation's leading expert on links between state public policies and their economic effects, who found "no systematic relationship between education spending and economic growth." Natelson said Vedder found negative relationships between most other government spending programs and economic growth.

"Moreover, the list of failures of government-run 'economic development' efforts continued to lengthen in the '90s," Natelson said. "The failures occurred both in Montana and elsewhere: Bad state loans, companies deserting the locales that had enticed them and many other problems."

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