By Jeffrey Michael
Montana’s economy may be experiencing slower growth, but the pace of change is as fast as ever. Among the most impactful events of 2025 were:
1. Massive data centers were announced outside Billings and Butte. The largest of these, proposed by Quantica infrastructure, is a 500 megawatt (MW) to 1 gigawatt (GW) data center on a 5,000-acre site north of Billings. Another two data centers are proposed near Butte by Atlas Power (up to 150 MW by 2030) and Sabey Data Centers (up to 250 MW). Construction is planned to begin in late 2026.
2. Governor Greg Gianforte signed what is estimated to be the largest income tax reduction in state history. The income tax cut has three components. 1) The top marginal rate, currently at 5.9%, will be reduced to 5.65% in 2026 and 5.4% in 2027. 2) The amount of income subject to the lowest 4.7% rate will more than double in 2026 and expand further in 2027. 3) The stateﾕs Earned Income Tax Credit (EITC) will double from 10% of the federal EITC credit to 20%.
3. Montana passed major property tax reform, cutting taxes for primary residences and increasing tax rates on second homes, short-term rentals, and non-residential properties. The first year of implementation, the bill introduces tiered property tax rates for residential property, increasing tax bills for homes over $1.5 million in value and cutting taxes for moderately priced homes. In the second year of implementation during the 2026 tax year, the bill will introduce a new homestead discount for primary residents and long-term rentals, which will result in higher tax bills for second homes and vacation rental properties.
4. Montana positioned itself on the frontier of allowing patient access to experimental treatment when it passed the first in-the-nation law (SB535 Montana positioned itself on the frontier of allowing patient access to experimental treatment when it passed the first-in-the-nation law (SB535) that allows firms to move quickly from a Phase 1 trial focused on safety into limited commercialization before Phase 2 efficacy trials are complete. This enhanced “Right to Try” law is stimulating interest from biopharma firms in developing “experimental treatment centers” in the state, which could boost the biotech and medical research and so-called “medical tourism.”5. The U.S. Forest Service announced it is closing the Region 1 Headquarters in Missoula that was established in 1908 as it consolidates offices and reduces employment. The Forest Service fire lab will remain in Missoula. This closure is the highest profile example of federal workforce cuts across multiple federal agencies across the state.
6. German vacuum technology manufacturer VACOM opened its U.S. headquarters in Lewistown in July 2025, beginning operations with a precision component cleaning facility currently employing 12-25 workers. The company projects a $90 million total investment and 500 jobs by 2027-2029, bringing another piece of the semi-conductor supply chain to Montana.
7. The One and Only, an ultra-luxury global hotel and resort brand, opened its first U.S. resort in Big Sky in November. One and Only Moonlight Basin sits on 240 acres and features a private gondola connecting it to Big Sky Resort. The least expensive rooms available this winter season are listed at $1,980 per night.
8. Intermountain Health broke ground in Spring 2025 on a nearly $1 billion replacement for St. Vincent Regional Hospital in Billings – Montana’s largest capital project ever. The 14-story, 737,000-square-foot facility is expected to open in 2029.
9. The “Flathead Lake Club” development is approved for Lakeside, Montana. The super luxury 1,700-acre resort community is backed by the Discovery Land Company, which also owns the Yellowstone Club near Big Sky.
10. The U.S. Department of Commerce announced a new Community Engagement Office for the U.S. Patent and Trademark Office at Montana State University in December 2025 that will be the third-largest hub in the western U.S. supporting innovators. A month earlier, Montana State University was selected as a Department of Defense Innovation Unit OnRamp Hub. The pair of announcements signal the Bozeman area’s continued emergence as a tech and innovation center.
Jeffrey Michael is director at the Bureau of Business and Economic Research at the University of Montana.
Photos courtesy of U.S. Department of Energy (left) and One&Only Resorts and Private Homes (right)
