Back in June, Montanans heard about the first budget cuts triggered by lower-than-projected state revenues. The onerous reductions were mandated in Senate Bill 261, a 42-page compilation of budget adjustments for multiple departments.
The state budget overestimated revenue, so the deepest spending cuts in SB261 are required. They fall hardest on health and human services, targeting case management, which is a relatively inexpensive service that helps seriously mentally ill and other disabled Montana children and adults navigate between doctor and therapy visits. Basically, good case management makes all treatment work more effectively. SB261 slashed $1 million from case management, and now will require a further rate cut.
In Billings, the South Central Montana Mental Health Center reduced staff and consolidated remaining workers by moving out of one building. In Missoula, the Western Montana Mental Health Center recently laid off dozens of workers, as reported Thursday by Lee Montana Newspapers.
Under SB261, the Montana Department of Public Health and Human Services proposed in June to cut Medicaid rates for home care, hospitals, nursing homes, medical clinics and mental health centers by 3.47 percent. People who rely on Medicaid and the Montana providers who care for them were right to push back. Many health care providers already lose money on Medicaid patients.
The Legislature’s Children, Families, Health and Human Services Interim Committee responded by lodging an objection to the Medicaid rate cuts, an action that could have delayed the cuts till after the 2019 Legislature.
The committee objection ignored the hard truth that state law requires a balanced budget. In other words, the Executive Branch doesn’t have a choice; it must reduce spending to reflect the reduced revenue.
Rep. Kathy Kelker, D-Billings, voted against the committee’s delay. “My concerns have been that holding up the implementation of cuts will only lead to deeper cuts later on,” Kelker told The Gazette.
Basically, the choice is between cutting general fund spending by several million over 18 months or cutting the same amount in less time. The loss to Montana’s economy will be closer to $24 million because each state dollar “saved” means the loss of about $2 in federal matching funds.
Last week, a majority of interim committee members voted to allow the 2.99 percent rate reduction (slightly less than the original proposal) to start on Jan. 1 as DPHHS proposed.
These rate cuts painfully demonstrate that our state budget isn’t supporting the essential services a majority of lawmakers and Gov. Steve Bullock agreed to provide just seven months ago.
The legislation approved in the November special session did nothing to stave off the Medicaid rate cuts. The Legislature and governor had to make an additional $76 million in spending reductions in November, along with making some transfers to balance the budget.
The revenue shortfall is a Montana problem that should unite our leaders to find equitable, prudent, compassionate remedies. Bullock and Montana lawmakers have much work to do.
If the legislative majority’s highest priority is to avoid increases in taxes, lawmakers should be honest and clear about what jobs and services they will eliminate to balance the budget.
It’s the job of our elected leaders to take the time to identify efficencies. Across-the-board cuts are inefficient, falling hardest on local providers who primarily serve Medicaid patients.
The new federal tax cut law may reduce Montana tax revenue further. Another record fire season could burn another hole in the state budget. The shortfall in funding essential state services isn’t going to resolve itself.