HELENA – From the state budget to tax relief to public-school funding, the big issues remain in flux as the 2013 Montana Legislature enters its final week – but legislative leaders say they’re mostly haggling over a few closing details before wrapping things up.
“I think we have the opportunity to balance the budget and leave some significant (surplus) and meet all our priorities, if we come together in the last six days,” Senate Minority Leader Jon Sesso, D-Butte, said Saturday.
But that doesn’t necessarily mean everyone will leave Helena happy. Republican majorities in the House and Senate are looking at their important issue – tax relief – and wondering if it might end getting the short end of the stick.
“I think you’ve got a majority of both Senate and House Republican caucuses who would like to see some tax relief,” said Senate President Jeff Essmann, R-Billings. “Unfortunately, there are a majority of Democrats and a minority of Republicans who seem to favor government spending over tax relief.”
Essmann is referring to a coalition of minority Democrats and moderate Republicans who’ve banded together to pass much of the session’s major legislation, including school funding bills that increase state spending on public schools by $75 million the next two years.
Also in the mix, of course, is Democratic Gov. Steve Bullock, who said Friday that House Bill 2, the main budget bill, is missing what he considers to be vital funds for things like the state prison and child abuse investigators.
The Legislature has passed HB2, but Bullock said he will veto the measure in its current form. Legislative leaders said Saturday they hope to negotiate with Bullock before sending him the budget bill for a possible amendatory veto, so they could work out a deal that enables the process to go smoothly.
House Speaker Mark Blasdel, R-Somers, said Saturday that Republicans are open to the governor’s concerns, but need to see something specific from him.
“He’s been relatively silent, rather than saying he’s going to veto (the budget bill),” Blasdel said.
Blasdel also mentioned tax relief as a Republican priority, saying he’ll be keeping a close eye on two remaining tax measures – one income tax, one property tax – that are in House-Senate conference committees for negotiation and likely amendment.
The scheduled final, 90th day of the session is next Saturday, although some leaders have said they hope to finish a day or two early.
A half-dozen major items are unresolved and could be part of the end-game negotiations, although some issues are closer than others to getting finished.
House Minority Leader Chuck Hunter, D-Helena, said it’s not much different than any session, when the big issues are up in the air until the final moments.
There are many things Democrats feel relatively good about, he said, like the school-funding proposal and the state pay plan, but the last days will decide some critical issues that remain undone.
Here’s a summary of the status of the remaining, unresolved major issues:
State budget: The main state budget bill, which spends $9 billion over the next two years, has passed the Legislature, but Gov. Bullock has said he won’t sign it in its current form. He indicated he wants to add spending for personnel at the state prison and additional child-abuse investigators, and perhaps make other adjustments.
Republican legislative leaders are negotiating with the governor’s office over what changes may be acceptable. Any changes must be approved by a majority of lawmakers in both the Senate and House, where Republicans hold majorities.
Tax Cuts: Two major Senate tax bills are heading to conference committee after the House substantially inflated the size of the cuts – and reductions to the treasury. A bill to simplify income taxes and reduce rates, originally costing $2.7 million, now has a $97.5 million price tag. The House also merged its own bill to reduce property taxes on business equipment into the surviving Senate bill, nearly quadrupling the cost to $30 million. The larger tax cuts added by the House may face trimming to balance the budget.
Medicaid expansion: Unless something extraordinary happens, this issue is dead. On Friday, House Republican leadership, by a single vote, kept the Medicaid expansion bill in a House committee bound to kill it. Sixty votes in the Republican-controlled House are needed to revive the bill – an amount Democrats haven’t been able to muster all session.
Oil and gas impact fund: There is broad legislative support for a bill that places at least $85 million over seven years in a new fund to pay for water and sewer projects, roads, bridges, police and fire protection and other “public welfare” services in eastern Montana areas impacted by an oil-and-gas boom along the Montana-North Dakota border.
Nonetheless, House Bill 218 was sent to a House-Senate conference committee on Friday, and could become a bargaining chip in the final days of the Legislature.
Public school funding: The Legislature has approved the bill enacting an historic rewrite of how Montana funds public schools, including some $53 million in new money for schools. It increases state lump-sum payments to schools, freezes local school property taxes, spreads oil-and-gas money among more school districts impacted by oil-and-gas development, and sets aside special natural resource payments for school construction. However, Senate Bill 175 could still be a factor in final-day negotiations, for Bullock has yet to sign it.
Pay raises: A bill is headed to Bullock for action to give most state employees their first increase in base pay in four years. It falls short of the proposed across-the-board 5 percent raises in each of the next two years negotiated by then-Gov. Brian Schweitzer and unions. The amended bill removes the 5 percent raises and provides 75 percent of the money that Bullock budgeted to fund the pay hikes. If Bullock signs the bill, he said he’ll reopen negotiations with unions.
Pensions: Two bills providing a financial fix to Montana’s pension funds are headed to Bullock. The funds face a potential $4.3 billion shortfall after their investments tanked during the 2008 recession. The two bills – one addressing the retirement system for teachers and the other for public employees – would raise contributions from employees and employers and require large infusions of state funds. They would cut the annual guaranteed annual benefit adjustment (GABA) for retirees and current workers, a move likely to be challenged in court.
Buildings: An attempt backed by Bullock to issue bonds to finance construction of new and renovated university system buildings and other projects appears dead because it can’t muster the needed two-thirds House majority. Instead, the Legislature has stuffed most projects into another bill, funded by cash and needing a simple majority to pass. It’s headed to Bullock and includes most of the original projects, but omitted buildings for the Montana Historical Society and Montana State University. The question is whether Bullock will amend them into the bill.