Butte: Economy

Major Industries and Commercial Activity

Since Butte's founding during a gold boom, its principal industry has been mining. From the mid-1880s to the 1980s, Butte produced an estimated $22 billion in minerals mined. More than 8 percent of the nation's copper continues to be produced in Butte, joining other important minerals such as lead, zinc, and magnesium. In the 1970s, when underground mines were closed, the copper industry began to decline; it reached its lowest point in 1983 when mining operations in the Butte area completely ceased for a time.

This recession began to ease in 1986 when copper mines were reopened, creating more than 300 jobs. This upsurge brought development in other areas such as transportation, tourism and recreation, small businesses, technology, energy research, medicine, and communications. Accolades have poured in during recent years, lauding Butte's economic resurgence, even earning the town a four-minute spot on the Paul Harvey radio program. Lou Tice of the Pacific Institute in Seattle hailed Butte as a "city on the move." Citing the economic rebirth of Butte, Tice attributed the successes to ". . . its people—their tenacity, their hard work and the remarkable goals they set."

Items and goods produced: motors, dairy and food products, compressed and liquefied gases, beverages, optical goods, chemicals, steel fabrications, phosphate products

Incentive Programs—New and Existing Companies

Local programs

The Butte/Silver Bow Tax Increment Financing Industrial District (Butte has two, comprising 1,300 acres) directs new tax dollars accrued from new development within the district to assist further development within the boundaries of the district. There are four other tax incentive programs available to local businesses that qualify. The Butte Local Development Corporation (BLDC), a principal catalyst in the region's economic turnaround, is considered one of the best economic development organizations for its size in the country. Its mission is to create jobs through industrial development. BLDC accomplishes these goals through capital acquisition, land and infrastructure development, development and maintenance of informational tools, economic analysis and planning, and numerous other activities. The BLDC also administers five loan programs.

State programs

State of Montana tax incentives include property tax reduction; no inventory, use, or sales tax; new industry income tax credits; small business investment tax credit; and tax reduction on pollution control equipment.

Development Projects

Government and industry leaders have organized to encourage expansion of Butte's economic base by capitalizing on the area's natural resources: agriculture, forest products, and mining. Steps have been made to reopen mines or help existing mines stay in business. The Montana Copper mine was reopened in 2003, creating 330 jobs and $11 million in annual payroll for local workers. The BDLC in 2004 announced renewed efforts to keep the Golden Sunlight and Luzenac America mines in operation, as well as provide assistance to the Northwestern Energy Corporation as it went through bankruptcy proceedings. The recently completed Port of Montana Hub, intended to facilitate the loading and transporting of minerals and forest products by rail and motor freight carriers, is expected to contribute significantly to the area's economic development. Other steps toward economic stabilization include the opening of a small business incubator, the establishment of Butte's Cyber Village and Silicon Mountain Technology Park where several science and technology firms have started up or relocated, and the development of the U.S. High Altitude Sports Center. Other efforts either completed or underway by 2005 included development of an East Side Urban Renewal Area, a music and entertainment district downtown, a new community ice center and jail, and improvements to the Civic Center.

Once called an "environmental wasteland" because of the damage done to it by mining and smelting, Butte is gradually recovering. The Atlantic Richfield Corporation (ARCO) had spent more than $400 million on reclamation work to repair damage in the area by capping mine tailings with clean dirt, landscaping, and re-vegetating damaged land. In 2004 ARCO agreed to contribute an additional $50 million to the Montana Superfund in efforts to clean up the Clark Fork Basin.

Economic Development Information: Butte Local Development Corporation, PO Box 507, Butte, MT 59703; telephone (406)723-4349; fax (406)723-4672

Commercial Shipping

Butte is a major inland port from which imported cargo is shipped via rail and motor carrier to points throughout the Midwest. Butte is located at the only rail interline in the state of the Union Pacific and Burlington Northern railroads. Piggyback service is provided, and trains run up to twelve times weekly from Butte. Several motor freight carriers regularly transport goods through facilities in Butte, with overnight and second-day delivery to major cities in the West and Midwest; in addition, well over 1,000 motor freight carriers serving the state have access to Butte.

Labor Force and Employment Outlook

When the Butte Job Service surveyed 10 major employers in the Butte area, they reported rates of absenteeism from 1 to 2 percent, and turnover rates that average 3 percent. Butte's labor force in 2005 included many potential employees and other well-trained workers with skills and experience beyond their present employment. Silver Bow County has experienced ups and downs in employment levels as it has made the difficult transition to a more diversified economy. Growth in the 1990s was driven in a large part by construction of the American Silicon Minerals corporate headquarters in Butte. Following the loss of construction jobs in 1999, employment losses were once again experienced with the shutdown of Montana Resources in mid 2000. Between December 1999 and December 2002, growth increased an average of 0.1% per year, and that pace has held to the mid-2000s. A particular bright spot has been the city's success in luring international firms to the Silicon Mountain Technology Park and Cyber Village.

The following is a summary of data regarding the Silver Bow County labor force as of 2001.

Size of labor force: 15,816

Average hourly earnings of production workers employed in manufacturing: $14.87 (Montana average, 2004)

Unemployment rate: 6.0% (January 2005, Silver Bow County)

Cost of Living

The following is a summary of data regarding key cost of living factors for the Butte area.

2004 ACCRA Average House Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: Ranges from 2.0% to 11.0%

State sales tax rate: None

Local income tax rate: None

Local sales tax rate: None

Property tax rate: $669.24 per $1,000 of taxable value. Assessed at 1.82% to 1.54% of the actual market value (2005)

Economic Information: Butte/Silver Bow Chamber of Commerce, 1000 George St, Butte MT 59701; telephone (406)723-3177; toll-free (800)735-6814; email chamber @buttecvb.com. Research & Analysis Bureau, Montana Department of Labor & Industry, PO Box 1728, Helena, MT 59624; telephone (406)444-2430