Montana Chamber opposes CI-97

By The Gazette State Bureau - August 19, 2006

HELENA - The Montana Chamber of Commerce said Friday that it opposes a constitutional initiative to limit certain state government spending and a separate ballot measure to raise the state's minimum wage.

Both measures will appear on the Nov. 7 ballot.

The chamber, which bills itself as the state's leading business advocate, said Constitutional Initiative 97 would strip state legislators of their power and responsibility to make budget decisions. In addition, the chamber said CI-97 would tie spending growth to an unpredictable inflationary index.

CI-97 would limit the growth in certain state government spending to a formula based on population growth plus inflation.

"We have seen similar proposals go through other states, which resulted in some undesirable consequences," said Webb Brown, the chamber's president and chief executive officer. "Complex budgetary decisions are best left to our elected representatives. We urge and expect them to exercise fiscal responsibility."

He said CI-97 could harm businesses by limiting spending on health care, worker training, public works and education.

Brown said the chamber opposed CI-97 and Initiative 151, which would raise the state's minimum wage, because both rely on indexes that adjust them for inflation.

I-151 would raise the state's minimum wage, frozen at $5.15 an hour since 1997, to $6.15 an hour in January or to the level of the federal minimum wage if it's higher. After that, the state's minimum wage would be adjusted annually by a cost-of-living index.

Besides the $1-an-hour hike, the index would boost the minimum wage and thus raise labor costs forever, Brown said. The CPI is calculated using price increases in 87 urban areas around the country, but none in Montana, Wyoming, North Dakota or South Dakota, he said.

"Since no Montana community is included in the CPI, price increases in New York and Boston will dictate wages in Eureka and Ekalaka," he said. "If prices in out-of-state, big cities dramatically increase, small business in Montana will feel the pain."

I-151 retains the current provision of state law that provides that the minimum wage is $4 an hour for businesses with gross annual sales of $110,000 or less.

In 2005, 6,000 Montanans were estimated to work for the $5.15-an-hour minimum wage, Bureau of Labor Statistics show, while 25,000 other workers, making between $5.16 to $6.14 an hour, would be affected by an increase in the minimum wage to $6.15 an hour.