Kearns and Sons RS Aesthetics

Water and the economy

By Michael Howell

Dr. Larry Swanson, economist and Director at the O’Connor Center for the Rocky Mountain West at the University of Montana, was the keynote speaker at this year’s second annual Water Symposium at the Bitterroot College.
Swanson said that he arrived in Montana in the fall of 1988 from Nebraska, where he had served for five years on the Natural Resource Commission which included several agencies involved in soil and water conservation. The state was being organized, based on hydro-geological considerations, into 24 districts based on watersheds over a total of 92 counties.
He learned a lesson while working on a ground water quality protection plan in that state on one of the largest fresh water aquifers in the world, the Ogallala aquifer which is centered under Nebraska but also reached into Oklahoma and the Texas Panhandle providing water to those regions as well.
But that water is gone and the state of Nebraska took the initiative to develop a statewide strategy for coping with ground water issues which include both problems of quantity and quality. What was developed, he said, was a pro-active plan to address water quantity and water quality issues rather than a reactive one.
He said when they took their plan to the capital in Lincoln it was not that well received.
“They thought it was too aggressive,” he said. “They told us it would not pass public muster.” But when they took it to the farmers and the ranchers and the general public what they found was, “they thought it wasn’t aggressive enough.” He said that’s when he realized that water was really a “sacred cow” and cut across all divisions. They told us, “tt’s precious and you can’t do enough to protect it.”
Does it need protecting? Swanson said that he participated in the first national assessment of ground water contamination in the country.
“We found contamination everywhere. Wherever we poked a hole in the ground and tested the water we found contaminants,” he said. These contaminants move through the ground water system slowly in Nebraska where the water may be moving a foot per year. But in Montana it can be moving up to one foot per day.
We have a much more dynamic water system in Montana,” he said.
Taking a look at the economy, Swanson said the economy in Montana and Ravalli County is steadily improving. “Recessions come and go, but we are right now in a steady recovery,” he said. The unemployment rate has come down from the highs reached in 2010-2011. Currently it sits around 4% to 5% and 4% is considered full employment nationally due to turnovers in the work place.
The unemployment rate was 3% in 2007 and was 3.7% last September. It hit 5.1% this past March compared to 5.6% a year ago in March.
The labor force of the county is gradually growing in size from a little over 15,000 early in 1996 to an all-time high of 19,579 in June of 2015. New highs occurred (20,014) in the labor force and total employment (19,094) in June of 2016.
Another interesting statistic is that Ravalli County has a high proportion of proprietor businesses, considerably higher than the statewide proportion. 40% of the employment in Ravalli County is proprietors.
Not all businesses were affected to the same degree by the recent 2008-20011 recession. The construction and real estate industries took the biggest hit, but revenues in the hospital and health care industry increased and governmental employment held steady with a slight increase.
“The point is,” said Swanson, “the economy is this complex web of interconnected sectors and there is always a lot of change in segments of the economy.”
Total personal income has been growing steadily since the 1960’s. At this point the income in Ravalli County is almost equally split between labor income and non-labor income such as investments, retirement accounts, and social security. Un-earned or non-labor income has comprised about 52% of Ravalli County’s total income since about 2010. It is expected to reach 60% in another five years. This is primarily due to the changing demographics, according to Swanson.
Per capita income in Ravalli County in 2014 was $36,063 and in 2015 had risen to $36,751.
Population in Ravalli County grew rapidly in the mid‘90s when at that time the county was the fastest growing county in Montana. Between 1992 and 1996, annual growth ranged from 3.8 to 5.9% a year. From 1999 to 2004, growth in the county slowed and ranged from 1.0 to 2.8% a year. The county’s population actually fell a bit in 2009 – this was during the recession years from 2008 to 2010. Over the last four years (2012-2015), annual growth has ranged from 0.5 to 0.1% a year. Estimates for June 2016, place the county’s population at 42,088, with growth over 2015 of 1.7%. All growth in the county population is coming from in-migration, as the birth and death rates have about equalized.
The role that water plays in the economy of the Bitterroot valley is tremendous, according to Swanson, feeding both the agriculture and the recreation industry. Grand total in angler spending of $28.4 million compares with total crop and livestock marketing receipts from $35 to $42 million a year in the county from 2012 to 2014.
Subdivision of the land is the primary culprit in diminishing farm revenues. The county’s ag lands have fallen from about 258,000 acres in 1980 to 240,000 in 1990, to 192,000 in 2000, to 166,000 in 2014, and down to 164,850 in 2016. Loss over this entire period represents 92,000 acres or almost 36% of the 1980 total. Numbers of livestock have fallen by almost half since the mid 1970s.
According to Swanson, the beauty of the landscape and the large amount of public land in the county (about 70% is forest service)  play a key role in the Bitterroot’s economy. He said when it comes to economic development these days, “quality” is the key word, quality of community, quality of the work force and quality of the surrounding environment.
“If the area is unattractive and damaged, it is out of the game,” he said. “The real key to economic development is not the giveaways and tax incentives, it comes down to, are you a learning community.” He said it was kind of like how you improve as a person, by learning.
“That’s what schools are all about,” said Swanson. “That’s what on-the-job training and experience is all about. It’s about learning. How do we become a community that is more adaptive and resilient, able to respond and understand the changes taking place around us.
“Water – good, clean, plentiful water – is as important to the future of Ravalli County and the Bitterroot Valley as any other attribute or asset the county possesses,” said Swanson. “It must be understood in order to be adequately managed and protected.”
“It’s what we are doing right here,” he said to the symposium attendees. “How many communities do this kind of thing focused around water? I haven’t been to another one in the state of Montana.”
Participants also heard a report from the Montana Bureau of Mines and Geology about a recent study of the ground water and surface water interconnections in the river bottom between Corvallis and Stevensville. They examined aquifer properties, flow scenarios and aquifer storage in the area. They heard from county and state officials and local agriculturalists and finished off with a community panel discussion.

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