(titles whooshing) - Coming up on "Impact": The Governor and his challenger both agree housing prices are too high.

- The cost of housing is probably the number one issue facing working families in Montana.

- We don't really have a functioning state if the people who make it go can't afford to live in it.

- [Breanna McCabe] We sit down with both of them for their take on solutions.

Plus a closer look at three important races for Montana's Public Service Commission, - We're trying to make sure that we have safe, reliable, and affordable public utilities.

- [Breanna McCabe] Those stories next, on "Impact."

(gentle compelling music) - [Announcer] Production of "Impact" is made possible with support from the Greater Montana Foundation, encouraging communication on issues, trends, and values of importance to Montanans, and viewers like you who are friends of Montana PBS.

Thank you.

(screen wipe whooshes) - Welcome to "Impact."

I'm Breanna McCabe.

As Governor Greg Gianforte seeks reelection, he does so amid a seismic economic shift.

In addition to the years of high inflation felt everywhere, Montanans face increasingly unaffordable housing.

The National Association of Realtors currently ranks Montana as the least affordable state to buy a home.

Montana PBS's Stan Parker sat down with the Governor and his challenger, Democrat Ryan Busse, to see what should be done about it.

(screen wipe whooshes) - [Stan Parker] The West End of Billings is like a lot of places in Montana right now.

New neighborhoods with freshly poured concrete popping up like dandelions.

But despite all this new construction, Montana still endures a painful shortage of affordable housing.

It's a concern the candidates for governor say they hear.

- I would agree the cost of housing is probably the number one issue facing working families in Montana.

- We don't really have a functioning state if the people who make it go can't afford to live in it.

- [Stan Parker] As Governor Greg Gianforte seeks reelection to a second term.

He's trying to walk the line between defending his record on housing.

- This is why I constituted my Housing Task Force- - [Stan Parker] And letting Montanans know he sees their struggle, - But there's more we need to do.

- [Stan Parker] All while his challenger, Democrat Ryan Busse is on the attack.

- I wanna be a governor who helps make it easier on working folks, who rolls back property taxes.

Not one like Gianforte, who makes it harder on them.

- [Stan Parker] Property taxes and housing affordability are two issues tied at the hip.

For as the rising cost of housing makes it harder on renters and home buyers, it also puts the squeeze on current homeowners in the form of higher property tax bills.

In Gianforte's first term, he sought to solve these issues using a tool that's become a signature of his administration.

The Task Force.

He put together bipartisan teams to pitch policies on both housing affordability and property taxes.

His prescription for the housing issue- - There's two levers to help expand access to affordable housing.

One is you have to increase the supply.

This is why we made the apprenticeship ratio changes.

'Cause if you want more houses, you need more carpenters, plumbers, and electricians.

It used to be that you had to have two journeymen for every apprentice in the state of Montana.

We flipped that, so now in Montana, one journeyman can supervise two apprentices.

That move alone quadrupled the number of apprenticeships slots.

Now the second lever we have in affordable housing is regulations.

This is why we changed the law in Montana.

It used to take over a year to get a well permit.

We changed the law, added some resources.

Now you can get a well permit in just about four months as opposed to over a year.

- There also seems to be a theme of limiting the kind of say that localities can have over what kind of developments come in.

And I'm curious if you think there might be a risk of the pendulum swinging too far the other direction.

- Well, again, government regulations are 40% of the cost of a new home.

Take Missoula as an example.

When I came into office, there was a lot of exclusionary zoning where you had to have so many acres, you had to have so many square foot.

We outlawed that in Montana.

So we have leaned in a little bit here with some common sense solutions.

- [Stan Parker] Perspective on local government control is one contrast between Gianforte and Busse.

- I want more building to happen.

I want our communities to be better thought out.

And I want, we had bills that were fought for and passed by Gianforte and the legislative folks in this last session, that limited communities' ability to control or to influence what their communities looked like.

I don't think that's the answer.

I think local communities ought to have more say than the state government does.

I don't think the state should be coming in and telling Bozeman or Missoula, or Great Falls, or Kalispell or anywhere else, really, what you have to do.

I think communities can figure that out.

- [Stan Parker] And he thinks the state could give home seekers a hand up.

- We can push low income tax credits that make it easier for folks to be able to afford to purchase, to rent places in the communities that they service.

- This is Busse's first time running for office, and still making a first impression.

As recently as August, nearly a third of Montanans told pollsters they hadn't yet heard of him.

With all that in mind, what do you want people to know about you?

- I'm a former firearms executive.

I grew up on a farm and ranch.

I tell people I spent the first formative 20 years of my life in a John Deere tractor and on the back of a horse, and I'm proud of that.

And I got what I thought was a dream job in the firearms industry.

I sold lots of guns, I helped build up a gun company, and I'm proud of that too.

And I'm proud of this state where we live.

I believe in public education.

I believe in the freedoms of Montanans.

I don't think it's the Governor's right to be in the doctor's office with women telling 'em what they can or can't do with their bodies.

And I sure don't believe in this taxation scheme of Gianforte's where we raise property taxes on everybody.

- [Stan Parker] The fact that residential property taxes went up under Gianforte's watch has become a centerpiece of Busse's campaign.

- Governor Gianforte was presented, just like the previous four governors had been presented with a budget note at the beginning of the session that says, "Hey look, if you don't roll back property tax rates, every single homeowner and small business in this state is gonna get hit with a property tax increase."

The previous four governors took that advice and rolled back the property tax rate.

This governor did the opposite.

He allowed property taxes to be jacked up on everybody.

We had a $2.5 billion surplus.

Billion.

We didn't have to raise people's property taxes and yet we did it anyway.

- [Stan Parker] Property taxes are complex, but knowing just a thing or two can go a long way towards cutting through the campaign rhetoric.

The first thing is that property taxes fund local services and education, including the university system, but not state government.

The next is that property tax rates, unlike income tax rates, are not a simple measure of how much a tax payer owes.

Property tax rates instead dictate how the tax burden is divided among different types of property.

So if property taxes on homes were rolled back as Busse suggests, the tax burden on homeowners would've indeed gone down by $112 million, according to the Montana Taxpayers Association, but it would've increased the burden on all other types of property by $103 million.

And due to the differences in each county's economy, would have had wildly different impacts in different parts of the state.

The Governor and legislature last session, opted instead for other forms of relief for homeowners, at the time, facing criticism from Democrats for not including renters in their plan.

- In the last session, we sent every Montana homeowner a check for over $1,300 to partially offset the increases they've seen.

We sent another $1,250 back to every Montana wage earner up to their maximum tax obligation.

So between the income tax rebates and the property tax rebates, a working family got almost $4,000 back.

But there's more to be done.

We need permanent relief.

So that's why I formed a Task Force on property taxes.

The proposal I like the best is something called a homestead exemption.

What this would do, and we plan on implementing this in the 2025 session, it would allow Montanans in their primary home to pay a lower rate.

It would also benefit renters and it would benefit small businesses.

And I think, but to pay for that, we're gonna charge out of state people with second homes here more.

- [Stan Parker] The Montana Taxpayers Association has something to say about this idea too.

They say, in part, that the numbers used to model the outcomes are likely inaccurate, and things could pan out differently than predicted.

Baked into Gianforte's messaging is also an allegation that property tax bills are going up because local spending is out of control.

- Now local spending has gone up 6% every year for the last over 20 years, whereas inflation's been just over 2%.

There's more spending than there is, than there is inflation.

And the local municipalities have just continued to spend and spend and spend.

- [Stan Parker] That's a message county commissioners have been pushing back on.

They say dealing in broad strokes ignores the details of what happens in each county.

Perhaps new spending is paid for with a large energy project that grew the tax base, or from federal grants like those in the American Rescue Plan Act.

Missoula County Commissioner Josh Slotnick put it like this: - "Missoula County, double digit increase in spending!"

Yeah, we got a ton of ARPA money.

We also competed successfully for a massive federal infrastructure grant in the Sxwtpqyen build area.

We put in sewer water, the road grid, enough infrastructure backbone to set the stage for development for 6,000 units of housing for the next 20,000 Missoulians.

Should we not have done that 'cause our spending went up?

It wasn't taxes that went up.

We got a massive federal grant.

It's just the easiest thing to do to say your spending is out of control and really, really difficult to try and describe this crowd.

- [Stan Parker] The reason homeowners got hit with such huge property tax bills requires a more nuanced view than can be found in the campaign rhetoric.

The increase is mostly due to the fact that tax bills follow the tax base.

And homes in Montana are growing in value faster than any other type of property.

The assessed value on a West End home here in Billings might have gone up more than 30%.

At the same time, the value of the bank building down the road went up 3%, and the value of the communication infrastructure that serves them both actually fell in the eyes of state appraisers.

Property tax policy is a bit like a 1,000 piece puzzle with a missing box.

And whoever ends up as governor for the next four years will be tasked with hashing out solutions with the legislature.

- Being Montana's 25th governor is truly the greatest honor of my life.

I love serving the state and my message is simple.

I wanna bring the American Dream closer to every Montanan, and we're doing it with our pro-jobs, pro-business, pro-family agenda and it's working.

- Our motto is Get your Montana Back.

And we mean that.

We really do mean it.

This is a state that's made me a better person and I feel like it's a state that changes people for the better.

And I think the very basic fabrics of what makes this state so special is under attack.

And I want people to know that Montanans care about it and we're gonna fight for it - [Stan Parker] For "Impact," I'm Stan Parker.

- The candidates agreed to one televised debate on the Montana Nonstop Local Network.

We are going to re-broadcast that debate here on Montana PBS multiple times, beginning October 17th.

The Public Service Commission is a small agency in Montana's executive branch, but it plays a big role ensuring affordable and reliable energy for Montanans.

Three commissioner seats are on the ballots in this year's election.

And as Montana PBS's Sam Wilson reports, the outcome could define the future of Montana's public utilities.

(screen wipe whooshes) (upbeat live music) - Hi folks.

Are you guys from Polson area?

Yeah?

Can I bother you for a second?

My name's Elena Evans and I'm running for the Public Service Commission.

They regulate monopoly utilities and... - [Sam Wilson] When Elena Evans decided to run for a seat on the Public Service Commission against unopposed incumbent Jennifer Fielder, the first step was just getting her name out there.

- Yeah, thank you.

Appreciate it.

Hey, folks.

Are you all from Polson area or... - [Citizen] I am.

- Running for office wasn't something I was planning on at all this year.

It wasn't on my bingo card you might say.

But then, after the primary filing deadline passed and there wasn't anybody really running against the incumbent, at a certain point, when you talk a lot, you just kind of gotta put your actions behind your words.

And so I found myself learning more about what it would take to get on the ballot.

- [Sam Wilson] To get on the ballot after the filing deadline, Evans had to get 3050 signatures and run without party affiliation.

She nearly doubled that number and has tried to keep the momentum in her campaign against Fielder who served two terms on the Montana Senate before joining the PSC in 2021, representing District 4 in Northwest Montana.

- It was actually a really refreshing change from being a legislator where politics are with you every day, but the Montana Public Service Commission, you don't bring your politics into the agency.

That's not what happens there.

We go in there and we've got laws to operate under and we need to be fair and objective in dealing with the parties that come before us, whether they're parties that are applying for an action for the commission or parties that are opposing those parties.

You know, wanting to stop us from acting.

We have to treat everyone fair.

And I've endeavored to do that and that's been really enjoyable.

- [Sam Wilson] David Sanders is the PSCs Executive Director, a relatively new position in the agency that answers to the five commissioners.

- The Montana Public Service Commission works for the people of Montana and we try to protect and balance the roles of regulated public entities and the people that they serve.

And so that balance includes sometimes safety regulations, sometimes economic regulations, but trying to make sure that we have safe, reliable and affordable public utilities.

Montana has five elected commissioners and there will be three commissioners elected this election cycle.

They're not elected at large, meaning statewide.

Those five commissioners represent a specific district.

And that was done by the legislature to try to bring a diversity of Montana's environments.

You know, I think people in Eastern Montana will tell you it's significantly different from the communities in Western Montana.

These are complex jobs, no question about it.

And being an effective public service commissioner requires a lot of study.

- [Sam Wilson] That complexity keeps the Public Service Commission on the margins of public attention.

But nothing cuts through jargon like increased bills and a unanimous vote from the PSC in late 2023 to approve a historic rate hike requested by Northwestern Energy has focused a spotlight on the otherwise quiet agency.

- I wish it would've been a lot lower.

The worst thing in the world is to have to go in and consider voting for a rate increase.

Nobody wants that.

I don't want it.

My constituents don't want it.

My husband certainly doesn't want it, you know, and I know my fellow commissioners don't want to have to do that.

But it is our job to fairly evaluate the evidence and to allow the company to pass on their valid expenses for providing the service to the customers.

- I mean, I think like most people, we've had increased costs and we're kind of feeling the pinch.

My family, we have a four-year-old and a six-year-old and my husband.

And so when we had that cold snap, I was putting cardboard up into windows and putting blankets on things to try and keep our energy costs low 'cause I knew it was gonna be high.

And I think the job is to ask hard questions.

I think it's important to work closely with the folks who are regulating and show them respect.

But I don't think that should result in rubber stamping of cost increases.

The job is to regulate monopoly utilities and make sure that customers are served and that profits aren't out of control.

And so that's not happening right now.

- If anyone, you know, anyone that's saying that we're rubber stamping is frankly quite ignorant about what's actually happening at the commission.

Anyone who's saying that the commission is broken is quite ignorant about the way the commission operates and the improvements that it's made over the last four years and the way it's rebuilt itself into a credible agency.

Some problems were widely reported in the media.

There was commissioner infighting, there was factionalization amongst the staff.

It was just an unhealthy workplace culture.

I took on a role as a commissioner with extra duties my first couple of years to help reform the agency and address those shortcomings.

And we've done really well.

The agency's a great place to work now.

It's a good, credible agency.

I think we've rebuilt the reputation and have much better relationship with the legislature and with the public.

- [Sam Wilson] When Tom Schneider served on the Public Service Commission in the '70s, '80s and mid '00s, the big conversations were about the development of the Colstrip generating plant in the aftermath of deregulation.

- The big issues at the commission are always energy resource choices.

They have a lot to do with how much you and I, everybody pays in their bills.

And if they make poor or impudent choices, if they continue to be mired in fossil fuel plants that were constructed back in the '70s and '80s, you're gonna pay a high price for that.

(passing engine revs) (knocking on door) - Hi there.

- Hello.

- I'm Brad Molnar.

- Yeah.

- [Stan Parker] There are other issues driving the race for the second district in South Central Montana where Brad Molnar is hoping to get elected to a third term on the commission after serving on the Montana Senate for the last four years.

- In about two weeks, the ballots come out.

It's been like 12 years since I've been a commissioner.

- [Resident] 12 years?

- So I'm trying to get my name out there a little bit.

Would it be okay if I put one of my signs out by the street and took it up the day after the election?

- [Resident] Oh yeah, go ahead.

I mean, I got no problem with that.

- Oh, great.

Assuming I get elected, I already have eight years experience.

I have four years on the Energy Committee in the Senate, which is four more years experience.

I have been involved in (rooster crows) and worked with the commission on several projects that have been very big.

So for 20 years I've been in this.

- [Sam Wilson] Challenging Molnar is Susan Bilo, a Democrat from Bozeman.

Bilo says she has 30 years of experience in the energy industry and that the solution for lowering electricity bills is simple.

Invest in renewable energy technology.

- If I were serving in the PSC right now and they came to, and I were to vote, I would say, "No.

I will not approve your rate increase, because you are not looking at efficiency measures on both sides of the meter.

And you are not giving renewable energy a fair shake."

Because right now, utility scale, wind and solar, even with battery storage, these cute little things right here, well, on a much bigger scale, right?

They can store electricity chemically.

And even with those, those power plants will cost less to build and operate and lower our bills and they're not being considered.

Now, a lot of people will ask, "Well how..." - Now they, you know, for the first time you're hearing, "But we have batteries.

We put it in batteries, we can store it."

Well, yippie-skippy.

(rooster crows) Okay?

How well does the battery function when it's 32 below zero?

"Well, we did some testing.

We think it did fine."

Okay.

Did you put it in Fargo, North Dakota or Billing in Montana or where?

"Well, we did it in a lab."

When you say renewables, "It's cheaper because there's no fuel cost."

A, there's a lot of cost in building one.

There's a lot of cost in mining the stuff for 'em.

There's a lot of risk in relying on rare Earth metals that come from China, okay.

But as far as cost goes, you're right.

Until it doesn't work.

- There are facilities that can cost less and provide electricity and be reliable and clean.

We can have it all.

What they're doing is they just invested in that Yellowstone County Natural Gas plant in Laurel.

They wanna acquire more shares of Colstrip.

And the reason they want to do that is because that provides a return on investments.

They can recover the fuel cost.

But the PSC can say, "Well yes, you're a company, you're allowed to make a profit for yourself and your shareholders, but where's that line drawn on you making a profit and then not overcharging our customers?"

So the PSC needs to say, "Hey, there are more affordable options that you need to consider because you can still make a profit on that."

But Northwestern Energy doesn't wanna look at some of the more affordable options because they can't make as much money.

- The Public Service Commission, I used to, maybe someday will, actually become auditors.

It's all we are is auditors.

We're not determining that Northwestern gets this.

It's by law, what are they allowed to recoup?

By law, what is the rate, a reasonable rate of return because they're publicly held corporation?

By law, did they make decisions that they would've made if they had had competition that would have come in and swooped up their customers?

And so that's where the big fight is.

- The first word in Public Service Commission is "public."

And so that's who we are here to serve.

And there's, you know, over a million people in this state who all deserve the right to be heard on the work that comes before us and the rest of the government for that matter.

But especially 'cause they have a direct stake in, you know, what their electric rates are gonna be, what their natural gas rates are gonna be, whether or not there's gonna be a train derailment in the river in front of their home.

Whether or not there, you know.

There's a lot of things that need to happen and be done right at this commission in order for them to enjoy the fruits of living in this great state.

- [Sam Wilson] For "Impact," I'm Sam Wilson.

- In race for the third district of the Public Service Commission, Republican State Senator Jeff Welborn is facing Democrat Leonard Williams.

The winner will represent Southwest and Central Montana.

With several dozen candidates vying for state and federal offices, we didn't have time to interview all of them, but Stan Parker sat down with a news outlet that did.

He has more on how voters can access all those candidate responses in a handy digital guide.

(screen wipe whooshes) - [Stan Parker] Helena based journalist Eric Dietrich is the Deputy Editor at Montana Free Press.

- We're a digital online news outlet and we publish at montanafreepress.org.

And also we really are kind of coming at coverage from the perspective of an old school newspaper.

- [Stan Parker] Dietrich is responsible for many of what he calls the outlet's digital products, like this tool that tracks bills through the legislature.

And most relevant to voters in an election year, the "Montana Free Press Election Guide."

- The Guide is really an effort to make sure that basic basic information on everybody on the ballot this year is out there and available.

For example, these are the four candidates that will be on the ballot for the US Senate race.

And you know, out of this listing, each of them has a a page with information, any kind of summaries about who they are, you know, who their opponents are, of course, links to their campaign websites, that's if we've been able to find 'em.

And then the response to the candidate questionnaires, kind of, you know, them talking about what it is they would like to do if elected.

We actually polled our readers trying to figure out what the most important issues to ask about were gonna be.

- This is a lot of candidates own words, which is something I'm not used to seeing on these kind of guides.

- Yeah, it is.

Yeah, so we have like, we made a point of giving a lot of space to the candidates' words.

I think there's value, right?

'Cause I think that you can kind of can get a sense for who they are and what they stand for.

And some of these issues we've asked about are not issues that they would be talking about on the campaign trail themselves.

- [Stan Parker] For "Impact," I'm Stan Parker.

- "The Montana Free Press Election Guide" also has a feature allowing users to enter their address to show them relevant races.

You can find it online at montanafreepress.org.

Well, that's all for this edition.

But on our next episode: (screen wipe whooshes) Montanans have seen and heard a record number of ads this season.

We sit down with a national expert to reexamine the ruling that opened the campaign money floodgates.

Plus an in-depth look at Montana's electoral process.

Hear from the Montanans responsible for ensuring its integrity on the next edition of "Impact."

(screen wipe whooshes) Until then, I'm Breanna McCabe and from all of us at Montana PBS, thanks for watching.

(compelling dramatic music) (compelling dramatic music continues) (compelling dramatic music continues) - [Announcer] Production of "Impact" is made possible with support from the Greater Montana Foundation, encouraging communication on issues, trends, and values of importance to Montanans, and viewers like you who are friends of Montana PBS.

Thank you.

(screen wipe whooshes) (bright music)