HELENA – The Bullock administration Wednesday made its opening pitch to the Montana Legislature for its $10 billion-plus, two-year state budget – and faced questions from Republicans about past raises for state employees and the budget’s increased spending.
Dan Villa, budget director for Democratic Gov. Steve Bullock, told a legislative budget panel that the governor’s proposed spending plan leaves the state in sound financial shape, while helping the economy, investing in education and tackling “long-term fiscal liabilities,” like public employee pensions.
He pointed to Bullock’s proposed $100 million tax rebate to homeowners as money that would be spent first at “Main Street” businesses in Montana, rather than other tax cut mechanisms that would benefit out-of-state corporations.
The Bullock budget also leaves the state with a $300 million surplus in mid-2015, he said.
Yet Republicans on the House Appropriations Committee and Senate Finance and Claims Committee noted that Bullock is proposing to increase general fund spending by at least $400 million the next two years, or about 10 percent.
GOP legislators also zeroed in on how many state workers have received raises the past year, despite the 2011 Legislature’s refusal to approve any base pay increase.
“As I understand it, every agency within the executive did have raises that went out,” said Sen. Ed Walker, R-Billings. “I just wondered how that works. What is the process that the executive goes through to determine who does receive pay increases?”
Villa, who was budget director under Democratic Gov. Brian Schweitzer for the past year, said raises were approved under the “broadband pay” structure, which allows managers to increase salaries for certain workers to keep up with the private sector, and for longevity.
State officials said later that about 5,900 state workers out of 12,200 have received raises in the past 20 months, after the 2011 Legislature voted down an across-the-board increase in base pay. The state Board of Regents, which oversees the Montana university system, also granted raises to most of its 5,000 employees in each of the past two years.
State employees haven’t had a base pay increase in four years. Bullock’s proposed budget includes a 5 percent base pay increase in each of the next two years, at a cost of $80 million.
House Appropriations Chairman Duane Ankney, R-Colstrip, said members of his panel certainly want to examine the issue, as well as the entirety of the Bullock budget.
“As for the pay plan and a lot of that stuff, we’ll just have to see how that plays out,” he said in an interview.
Legislative budget subcommittees, which are controlled by Republicans, start examining Bullock’s proposed budget Friday.
Ankney said Republicans have no specific agenda for the budget at this point, but that the subcommittees will be voting Friday to have the 2012 “base year” budget as a starting point.
Bullock’s proposed budget assumes an inflationary increase for state programs as a starting point. If the 2012 year is the starting point, any increase for the next two years would have to be approved by the subcommittees and the Legislature.
Villa said Wednesday the move is an “artificial rollback” on agency spending and that if the Legislature adopts 2012 budgets as a starting point, it’s refusing to fund programs it has already approved.
Other highlights of the Bullock budget include:
• Funding for an ambitious state building program and money for school building improvements.
• Increased state funding for public schools and the state university system.
• Eliminating property taxes on up to $100,000 worth of equipment owned by businesses.
• Expanding Medicaid, the state-federal health coverage plan for low-income Montanans, by some 60,000 people.
• Financing the state’s $72 million cost of water compacts with the Blackfeet, Fort Belknap and Confederated Salish and Kootenai Indian tribes.
Missoulian State Bureau reporter Mike Dennison can be reached at 1-800-525-4920 or at firstname.lastname@example.org.