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House panel's $11 million not enough, says governor

HELENA - A House budget committee Friday approved $11 million in immediate funding for a series of economic-stimulation programs, slightly less than the amount Gov. Marc Racicot wants lawmakers to approve during the May 8 special legislative session.

The Republican governor said the bill isn't good enough.

The House Appropriations Committee voted 10-7 in favor of a heavily revised measure to spend state treasury money on short-term and long-term programs designed to boost Montana's economy. As amended by the panel, House Bill 1, by Rep. Karl Ohs, R-Harrison, provides $11.02 million this fiscal year in financing for the projects and $8.4 million each year thereafter.

That amount is about 15 percent less than the $13.3 million Racicot wants to spend in the short-term and less than the $10.4 million Ohs' measure sought in permanent spending for the package. Racicot and Ohs had earlier worked out a compromise to combine their spending plans into one bill carried by Ohs.

But in committee, Rep. Ernest Bergsagel, R-Malta, reworked the bill to provide slightly less money, specifically in grants for public works, and cap the amount of permanent spending for some programs.

He also successfully changed the bill so it terminates in 2005, forcing lawmakers to revisit it if they want it to continue.

Dave Lewis, Racicot's budget director, said the governor is glad the committee approved the bill and sent it to the full House for consideration, but still wants his compromise legislation with more funding for the programs. As for the committee's changes, he said, "none of them are really acceptable at this point."

"They made a good start, but it's certainly not the bill we had endorsed nor had hoped to see out of committee," said Lewis. "We'll continue to work with the Legislature to try to make the changes we'd like."

Barring any changes, the bill will be among the first bills debated by the House when it meets May 8.

Ohs said although there's work to be done, the changed bill isn't that far off from where he'd like it.

"I think there are some things here we'll have to take a hard look at," he said. "I think we'll have to get back as close as we can to the compromise with the governor."

Appropriations Committee members met this week in advance of the May 8 session to avoid prolonging the official legislative meeting beyond six days. The panel met jointly for three days this week with the Senate Finance and Claims Committee to hear exhaustive testimony in favor of a package of economic programs backed by Racicot and for which the session was called.

Providing funding for the economic programs became an issue in January after the Montana Supreme Court declared their original financing, contained in a 1999 law, unconstitutional.

Prior to approving the economic package, the House committee also approved funding for the special session of $427,000 for six days, or an average of $71,166 per day.

In approving the economic package, which provides funding for university research, agricultural enhancement and business development, Democratic lawmakers balked at the massive changes, scratched out on a piece of paper, and wanted more time to review the bill before going ahead.

"I feel like we're out here with both feet planted in mid-air," said Rep. Ray Peck, D-Havre.

But Appropriations Chairman Rep. Tom Zook, R-Miles City, urged members to move ahead.

"We'll just do the best we can," he said. "I know it's uncomfortable."

On Thursday, both the House and Senate budget committees picked through the governor's programs, questioning the legitimacy of them and whether they truly would spur economic growth in Montana.

Racicot's bill, which went without a sponsor, ultimately was dropped instead of Ohs' measure, HB 1.

Economic development: House Bill 1

Here's a look at HB 1, the bill heavily revised and approved Friday to fund a series of economic development programs. All of the funding, except for money for the university system, would come from interest income off of $140 million of the state's permanent coal trust fund.

  • $3 million in fiscal 2001 in one-time state money for public works projects
  • $3 million in fiscal 2001 in a one-time money paid directly to the Board of Regents for university research matching grants
  • $1.65 million in fiscal 2001 in one-time money to the Board of Research and Commercialization for research grants and board administration
  • $5 million, each year from fiscal 2002 through 2005, to the Board of Research for research grants
  • $65,000 each year through 2005 for the Cooperative Development Center to promote cooperatives to provide economic development in rural Montana
  • $1.25 million each year through 2005 million for Growth through Agriculture grants and loans
  • $350,000 each year through 2005 for business recruitment
  • $300,000 each year through 2005 for export trade enhancement
  • $125,000 for small-business development centers
  • $50,000 for small-business research
  • $425,000 for communities to conduct water and sewer engineering work
  • $200,000 to the Montana Manufacturing Extension Center
  • $600,000 to Butte-Silver Bow for its tax increment financing district

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