This week Governor Bullock released his 2017 Biennium Budget, making strategic investments in our communities and our state economy. To name a few, we were happy to see the Governor is leveraging federal taxpayer dollars to expand health care coverage for thousands, investing in the education of our youngest learners through Early Edge, and expanding investments to students attending tribal colleges across the state. You can read our full statement here.
The Governor is also increasing investment in entrepreneurs and small businesses in Indian Country, through the Indian Country Economic Development (ICED). Since many of you might not be familiar with it, we thought it would make a great wonky word for this week.
The ICED program started in 2005 as a way to empower Montana’s tribes to take a hands-on approach to strengthening reservation economies knowing that a strong economy allows for the creation and retention of local jobs, the establishment and growth of businesses, and the ability to keep money in the local community.
Tribal communities and businesses located in Indian Country often face additional barriers to accessing capital and loans, as their neighbors. Tribal land is not private property; it is federal trust land, and therefore cannot be used as collateral for business loans. The lack of financial investment often results in businesses unable to thrive on reservations. And this has a direct impact on the economies of these local communities. Without strong local businesses, individuals must leave the reservation to purchase retail goods and consumer services, resulting in an exit of investment in the local economy and contributes to a lack of available jobs.
The state established the ICED program to allow community members to become economically self-sustaining and financially independent, while demonstrating attainable business models for others in the community. The funding for the program provides support for:
The funding requires tribes to provide a 1:1 match of funds, which they have far exceeded since the inception of the program. In the past, tribal governments have provided, on average, a $5.60 match for every $1.00 of Montana’s investment. And tribal communities have created over 200 jobs with ICED funding. In other words, Montana’s share of initial costs has been just 15% - a small investment with big impact.
To date, ICED funding has been one-time-only funds which means it must be re-approved every two years. This makes it difficult for tribes to formulate long-term development strategies. However in yesterday’s budget release, Governor Bullock proposed including $1.6 million funding for ICED into the base budget. If approved by the Legislature, this funding would be ongoing.
The ICED program has been proven effective and has the potential to have wide-reaching and longstanding impacts on Montana’s economy. Another great benefit of this program is that it demonstrates a positive government-to-government relationship and an opportunity for state and tribal governments to work together constructively.
Do you have any wonky words you want explained before the Legislative session begins on January 5? Let us know on our Facebook page.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.