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Schweitzer's final budget proposal boosts education, health care

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HELENA – In his final budget, Gov. Brian Schweitzer on Thursday proposed spending more on education and expanding health care coverage for low-income people, while still leaving a record $410 million estimated surplus by mid-2015.

It contained some financial commitments Schweitzer had previously made. These included freezing college tuition for two years, funding 5 percent pay raises for state employees in each of the next two years after smaller increases were rejected by the 2011 Legislature, and committing money for his plan to help bail out, over time, state pension plans that face $3.9 billion in potential future debts.

He again lent his support to the issuance of nearly $88 million in state bonds at the current low interest rates to pay for construction of new buildings and repairs of current facilities at state colleges and universities and for a new Montana Historical Society building. Lawmakers defeated a similar plan two years ago. The investment would create more than 2,100 jobs, he said.

Schweitzer committed for the first time to expand Medicaid health care coverage for 80,000 low-income people in 2014, as part of the federal Affordable Care Act. (See related story.)

He also proposed spending $72 million for water compacts with tribal nations in Montana.

Schweitzer leaves office in early January and turns over the reins of state government to incoming Gov. Steve Bullock, a fellow Democrat and the state’s attorney general.

Bullock can propose modifications to the budget reflecting his own priorities and will do so by the end of December, spokesman Kevin O’Brien said later. (See related story.)

The budgets go to the Republican-controlled 2013 Legislature, which has the power to appropriate money to fund state government for the next two years. The appropriations bill ultimately will go to Bullock for his signature, veto or any line-item vetoes.

Incoming Senate President Jeff Essmann, R-Billings, was noncommittal on the Schweitzer budget, but looked forward to seeing Bullock’s budget.

Schweitzer boasted that he had left record surpluses – officially called ending-fund balances – throughout his nearly eight years in office and was proposing more for the next two fiscal years. He said some past governors inherited messes from their predecessors with surpluses hovering below $50 million.

“We are actually not handing a mess to the next governor,” Schweitzer told a news conference at the Capitol. “We are handing the largest ending balance in the history of the state and the largest cash position. ”

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The Schweitzer budget proposal calls for spending a total of $4.16 billion in state general fund money over the next two years, up from the $3.77 billion appropriated in the current two-year period.

Like all of Schweitzer’s budget proposals the past nearly eight years, this one includes no tax or fee increases and relies on projected revenue increases that are greater than the projected budget increase. Schweitzer said state spending would increase by 2.94 percent and 2.62 percent under his proposal for the next two years, while revenues would rise by 3.93 percent and 3.04 percent over the same years.

“So not only do we start with a lot of cash in the bank, but we balance our budgets,” Schweitzer said. “We do better than balance our budgets. We make sure we have grain in the bin.”

Schweitzer proposed what he called historic investment in K-12 education, with a $67 million increase, along with a previously announced tuition freeze for students in state colleges and universities, which costs $34 million.

Education makes up 50 percent of the state budget.

“It’s probably the most important thing that state government needs to do to get right because if there’s anything that we can do for the next generation, it is to help them become the best-educated, best-trained workforce on the planet,” Schweitzer said.

If legislators don’t deliver on the $34 million for the tuition freeze, “on that day, they are increasing taxes on the families of Montana,” Schweitzer said.

He called for spending $67 million more on K-12 schools, including money budgeted for the Digital Academy, an online learning center. That’s in addition to the $4.6 million restored over the last biennium that had been cut by the previous Legislature.

Schweitzer said previous Republican governors and Legislatures failed to fully fund K-12 schools, which shifted the burden to local taxpayers. The same happened with higher education when lawmakers and governors cut the state’s support, it led to tuition hikes, he said.

Finally, Schweitzer proposed $30.8 million in new support for the state Corrections Department. This would include $1.1 million for a “re-entry initiative” to reduce reliance on secure correctional facilities in favor of less costly community corrections programs, enhancing treatment and counseling options for offenders and investing more in pre-release facilities. The additional money would go for provider rate increases and pay adjustments for correctional officers because of the 2011 Legislature’s defeat of the pay plan.

The Schweitzer budget also includes $8.18 million in proposed funding to address the caseload in the Office of Public Defender.

It was something of a grand finale for Schweitzer, who mixed his budget and policy notes with colorful commentary and threw barbs at the Republican-controlled Legislature and “those jackasses in Washington, D.C.,” talking about budget problems.

His Cabinet members and staff crowded into the reception room for what likely will be one of his final news conferences and gave him a standing ovation when he concluded.

Missoulian State Bureau reporter Charles S. Johnson can be reached at (406) 447-4066 or at chuck.johnson@lee.net.

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