A state budget disaster has been averted, but Montanans must now brace ourselves for the drastic cuts to come.
Make no mistake: These reductions are going to hurt. They shift the state’s financial burden squarely onto some of our most vulnerable neighbors. Combined with other poor decisions made by some of Montana’s legislators during the special session that adjourned shortly after 1 a.m. last Thursday, Montanans will be paying the price for legislators’ refusal to consider new sources of revenue far into the future.
And when we do, Montanans ought to talk to these same legislators who are now bragging about shrinking state government and not raising taxes.
The special session was absolutely necessary to fill significant budget gaps after state revenue projections fell short of the amounts appropriated by legislators during the regular session earlier this year.
Montana was facing a $227 million shortfall before Gov. Steve Bullock abruptly enacted $76 million in cuts he had outlined in a proposal announced shortly before the start of the special session. Bullock didn’t have a deal in place with GOP majority leaders before convening the special session. In a meeting with the Missoulian editorial board several weeks ago, Bullock explained that he couldn’t arrive at a deal because Republican leaders refused to compromise raising taxes. It turns out the governor was right.
The other two parts of Bullock’s three-part budget proposal called for $75 million in temporary tax increases and $75 million in transfers from other funds. Republican leaders in the Legislature, however, remained unmoved from their oft-repeated pledge not to raise taxes.
A refusal to raise taxes no matter the consequences should never have become a driving factor in state budget talks. Legislators who are themselves a part of state government ought to be able to recognize the essential beneficial role of government in the everyday lives of Montanans. Their job, in fact, is to make that government work as efficiently and effectively as possible.
Yet no one can seriously argue that the budget deal hammered out during the special session leaves Montana government better off.
Montana Republicans, who hold a majority in the state House and Senate, not only accepted the governor’s cuts – they demanded more. They also OK’d transferring money from other funds and delaying state payments in order scrape up another $94 million. The closest they came to approving a new tax was voting to enact a new “fee” on the State Fund, the largest provider of workers’ compensation insurance in Montana. This badly conceived and possibly unlawful idea was originally suggested by Bullock, and is expected to generate $30 million over two years.
Demonstrating that they have little idea how the State Fund functions, legislators also approved a requirement that the fund’s managers cannot charge the fee to its policyholders. They fail to understand that this money will still come from policyholders’ pockets in the form of smaller dividends.
Legislators also agreed to require furloughs for certain state government employees who earn more than $50,000 a year, for a savings of $15 million, although Bullock has said he plans to veto this action.
One bright spot was the creative proposal to change the state liquor licensing system from a lottery to an auction, which is expected to generate about $6.3 million over the biennium. It’s a sensible idea that seems worth a try, and can always be reversed if it ends up creating more problems than it solves.
Unfortunately, it was overshadowed by legislators’ stunning move to eliminate $13 million in block grants to school districts throughout the state. What that means is that local property owners will be forced to pick up a greater share of the tax burden – or watch our schools suffer their own budget shortfalls.
Finally, Republicans found a way to essentially force the governor into accepting a deal with a private prison company by passing a bill that creates an account to accept money from the company, CoreCivic. The company is offering to return $32 million in state payments if Montana puts that money toward the purchase of a prison facility in Shelby. It also wants its 20-year contract extended for another 10 years.
The way the fund is set up, half the money would be diverted to the state fire fund and the other half would be discretionary. This year alone the state racked up $75 million in wildfire costs. There’s no telling what sort of firefighting bill Montana will be facing next summer, though it would be smart to plan for at least as much as this year, if not more.
Still, Republican leaders are celebrating this arm-twisting as a win for Montanans – as they simultaneously try to pin blame on Bullock.
Within hours of the session adjourning, they released a statement saying, in part: “The fact is that the Governor didn’t have a plan when he called us here. He wanted to force us into a corner to raise taxes without taking any action on his part to mitigate what he was calling a ‘crisis.’”
Far from being “forced into a corner,” however, these same Republicans are now crowing about how they did not, in fact, raise taxes. “I’ve ran six times for the Legislature and have always said I’m not going to raise taxes,” Senate President Scott Sales, R-Bozeman, said after the session. “I feel good about the fact that transpired for the most part.”
He should not feel good about that at all. No legislator should.
The main budget bill, House Bill 2, passed pretty much along party lines. It sets new budget bases that make the cuts essentially permanent – even if revenues come in higher than current projections.
It’s clear, for one thing, that the revenue projection models on which the state budget is based are in need of improvement. Montanans should urge our legislators to work on that before the next regular session begins in 2019.
But even more urgently, legislators should also be made to understand that their refusal to consider raising taxes, and the cuts that some of them insisted on will end up costing the state more in the long run. The very serious consequences of their actions in the special session are not being treated with the gravity they warrant.
Instead, the GOP majority is giving all the appearance of playing political tiddlywinks with the lives of real Montanans. The careless, cavalier attitude of our legislative leaders only serves to erode the public's confidence in our state government; confidence that may prove difficult to earn back.