LET'S CLARIFY SOME ISSUES

Republicans believe in a clean, truthful campaign based on the real issues

Deregulation:  Democrats claim deregulation caused electricity prices to increase in the Flathead and Columbia Falls Aluminum Company to shut down.

Truth:  Democrats supported deregulation big time. Deregulation legislation carried by a Democrat (Bill Ryan, Great Falls) passed the House 78 to 21 and the Senate 35 to 15. Everyone knows that America's free enterprise system generally gives us the best product at the lowest cost. Legislators on both sides were optimistic that electricity would be cheaper with deregulation -- just like long distance telephone calls and airline tickets. No one foresaw our severe drought, California's electricity shortages and electricity market manipulation.

Truth:  The Flathead gets its electricity from Flathead Electric Co-op, which, like all non-profit, customer-owned Montana cooperatives, was not regulated before deregulation, and is not regulated now. FEC negotiates contracts with electricity suppliers, getting about half of its power from the Federal Gov. (BPA) and the rest from private suppliers (PPL).  FEC's contracts expired last summer when the price of electricity was dropping, but still high in the wake of the California fiasco. Even so, FEC's current contract price is average when compared to other Montana power co-ops.  Columbia Falls Aluminum Plant also got their electricity from (BPA) and also was not impacted by deregulation.  However, because of deregulation CFAC was able to get their new supply of electricity at very attractive rates from the free market system and is now the only currently operating aluminum plant in the Northwest, saving hundreds of jobs.

Montana's deficit:  Democrats say tax cuts caused the deficit.

Truth:  The decrease in corporate profits and capital gains caused the deficit. Montana's nonpartisan Legislative Services Division reported that all sources of income were close to projections -- except individual and corporate income taxes and capital gains. In these slow economic times, corporations, individuals and investors are not making as much money. If they were, there would be no deficit.

Residential taxes:  Democrats claim Republicans shifted taxes from big corporations to residential homeowners.

Truth:  Republicans passed laws in 1999 implementing new property assessments, which reduced taxable property values and implemented a 15% statewide reduction in your residential property taxes. Republicans also eliminated state inheritance taxes and reduced your vehicle licensing fees by about 30%.

Business equipment tax:  Democrats claim Montana's 19 largest corporations received 80% of the $120 million in tax breaks.

Truth:  Business equipment taxes were reduced from 6% to 3% across the board for businesses.  Businesses with less than $5000 worth of equipment are now exempt. Over 5000 small businesses in the Flathead do not have to pay this tax.