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Gov. Steve Bullock

Gov. Steve Bullock issues a call Monday to call lawmakers for a special session to address lagging state revenues.

The financial hit to higher education won't be as large as anticipated if Gov. Steve Bullock's proposed budget stands.

Bullock, a Democrat, called a special session of the Montana Legislature next week to resolve the state budget and revenue shortfalls.

Earlier, the Montana Office of the Commissioner for Higher Education was anticipating a cut as steep as 10 percent, or some $44 million for the biennium, but the governor's proposal spares higher education and calls for a 1.2 percent reduction in the 2018 and 2019 fiscal years.

Kevin McRae, deputy commissioner for communications in the Commissioner's Office, said the proposal coming out of the governor's office seems to recognize that students shouldered one of the largest real-dollar cuts — $10 million — to the state budget from the regular legislative session.

The amount represented a cut of just 2.6 percent a year for the university system, but McRae said it also created a $20 million unfunded obligation.

In May, the Montana Board of Regents approved a tuition increase that took effect this fall and covers roughly 75 percent of the unfunded obligation, McRae said. He said the university system is cutting its way through the remaining $5 million.

"We're grateful that the recommended budget takes that into account, that students are already paying more for education that is continually challenged in terms of access and affordability," McRae said.

As proposed, the cut to higher education would be some $4.5 million over the biennium, but approval isn't certain.

Speaker of the House Austin Knudsen, a Republican from Culbertson, earlier criticized the governor's plan in a news release.

“Let’s be clear here. The governor expects the Legislature to raise taxes on hardworking Montanans before any effort to reduce non-essential services has been made,” Knudsen said in the news release.

Bullock’s strategy splits the shortfall into thirds and calls for raising $75.1 million from temporary tax increases and another $76.5 million from fund transfers and other legislation. The final third of the potential solution would be cuts targeting most state agencies and totaling $76.6 million.

If across-the-board cuts had stood at 10 percent, the University of Montana's share could have been some $6 million a year. If the university system has to absorb 1 percent, UM's share could be just $600,000, and Montana State University–Bozeman's share could be about the same.

However, the regents can choose to distribute cuts across the system as they see fit once the Legislature approves budgets.

Rosi Keller, vice president for administration and finance at UM, said the campus will begin to address the reduction once it's final. At this point, she said the proposal from the governor's office is positive for UM and other schools.

"The recent news is very promising for the campuses, but we are not making any final plans until such time we know the final reduction amount," Keller said in an email.

Reporter Holly Michels contributed to this story.

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University of Montana, higher education