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Panel takes no immediate action on plan

HELENA - State lawmakers Thursday picked apart Gov. Marc Racicot's $13.3 million special session economic-development package, questioning whether the plan will really help bring Montana out of the financial doldrums.

Members of the joint House Appropriations and Senate Finance and Claims committees met for about eight hours in a packed, windowless room sifting through portions of Racicot's programs geared for economic development, university research and agricultural enhancement. The panels took no immediate action on the plan, which is one of the focuses of the upcoming May 8 special legislative session along with GOP-backed tax cuts.

Thursday's meeting was one of several being held in advance of the official convening of the session. Lawmakers decided to hold hearings on bills beforehand to avoid prolonging the legislative meeting beyond the scheduled six days.

Committee members expressed skepticism over whether the governor's multimillion-dollar, one-time economic development plan would be successful and really boost Montana's economy. They also poked at the level of funding for some of the projects and questioned state agencies about the legitimacy of them.

"We never hear what kind of bang we're getting for our buck," said Sen. Tom Beck, R-Deer Lodge. "Tell us what the grants will do and what kind of return for our dollar we'll get?"

But one by one, dozens of backers of the governor's programs, including university system officials, farmers and ranchers and business people, tried to respond to such questions and urged lawmakers to act favorably. They insisted the programs bring positive returns by providing needy financing to new and existing businesses, breeding new technologies and helping farmers stay in agriculture.

"By every measure you have, Montana is falling toward the bottom," said state Commerce Director Peter Blouke. "I think it's important we see what can be done to move Montana off the bottom and further up the rung."

Added Richard Krott of the Rocky Mountain Trade Corridor: "If Montana doesn't step up to the plate and get in the game, we'll be way behind, maybe even more than we are now."

Lawmakers, however, bored into the requests behind those pleas, primarily because taxpayer money now is at stake, said Senate Finance and Claims Chairman Chuck Swysgood, R-Dillon.

Lawmakers already reviewed many of the economic programs during the regular 1999 Legislature, but at that time they were to be funded with the state's permanent coal tax trust fund. Now lawmakers are being asked to pay for the programs out of the general fund.

The coal trust fund method was ruled unconstitutional in January by the Montana Supreme Court, which said the Legislature illegally diverted the coal taxes without the necessary three-quarter vote in each chamber. That ruling ultimately led to next month's special session.

"What we're trying to figure out is where's the economic development for our state in the programs, that's what we're after," Swysgood said. "We want to find out, if we put money in the programs, is there going to be a measurable result to the economic development of the state of Montana?"

Swysgood said it's possible lawmakers won't give the programs the full $13.3 million Racicot requested. At the same time, he said, it's commonplace in any session for lawmakers to be inclined to provide less than the governor wants.

Yet those testifying in favor of the governor's plan, who met no formal opposition, said the economic dividends will come, but only with help from the state. Walter Hill, a University of Montana professor, said the state isn't even coming close to competing nationally, specifically with its research, and pleaded for more funding for state campuses.

"I promise if you do it, you'll see benefits," said Hill. "Not tomorrow, not next year, but you will see benefits in the future."

Higher Education Commissioner Dick Crofts urged approval of the largest share of the governor's plan, $6.6 million, to use as a match with federal grants for growth in university research. Without $6.4 million of that amount, Crofts warned programs would shut down and serve as a step backward for the economy.

That means there's little else for other research firms since under the governor's plan that research money is to go to a six-member board, which reviews applications and distributes the money to the most worthy. The university system is just one possible applicant, but under the governor's plan all the funding is essentially pre-dedicated to it.

One board member, Gary Buchanan of Billings, a stockbroker and former state Commerce director, called that into question and urged lawmakers to either give the $6.4 million directly to the university system and bypass the board altogether or give the board more money to distribute so others can get a share.

He said "there's far too much political hype here" and the board is just set up to disappoint lawmakers who expect it to distribute the money fairly.

"Why waste our time?" he asked.

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