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Lawmakers agree economy needs help but how and when divides Democrats and Republicans

HELENA - Montanans should have seen it coming. It started as a mess, it's been a mess and it's likely to get even messier before all's said and done.

The Montana Legislature convenes for a special session on May 8 to address spending $13.3 million in state treasury money on a series of economic development programs and to consider cutting taxes by as much as $100 million. Although most lawmakers agree bolstering Montana's economy and providing taxpayer relief are the right things to do, there's nary an agreement on how or when to get it done.

And that's sure to set the stage for the upcoming session. Democrats, Republicans and even Gov. Marc Racicot began battling more than a year ago over how to salvage Montana's weak economy. They haven't stopped fighting.

Republicans, who have the political muscle to get it done, pledge to get the economic programs and tax relief approved, even if they have to send it to the ballot for voters to decide. They also are unwavering in their position.

Democrats want a special session to focus solely on spending the $13 million on the economic package and have opposed GOP tax cuts or long-term economic development plans. They are vowing to fight Republicans each step of the way, and now are even proposing tax reductions of their own.

Racicot, also a Republican, appears to be defying his party because he wants simply to pay for the programs on a one-time basis. He's threatened to veto the GOP tax cuts.

The parties can't even reach consensus about what the tenor of the upcoming special session will be. Democrats anticipate a drawn-out political circus, while Republicans expect orderly debate and a rapid result.

Senate Minority Leader Steve Doherty, D-Great Falls, says he fears the upcoming session will be mired in politics, not only because of the issues themselves but also because the state faces one of its hottest primary elections just four weeks later. There's sure to be more than the usual political grandstanding, he says.

"If the past is any predictor of the future, we can expect the most sorry, mismanaged and politically driven feeding frenzy in recent history," he says.

Yet, House Speaker John Mercer, R-Polson, has a more optimistic view. He acknowledges the session will be hectic, given the five- to six-day time frame lawmakers have set, yet he's confident it will be orderly, despite the differences of opinion.

"You never know what the exact path will be with the Legislature, and if you look in the rearview mirror you can see where it's taken interesting twists, but they're not the kind of twists that elongate the session or result in civil war," says Mercer.

Mercer led his party, which holds the majority in both the House and Senate, to add income and property tax cuts to Racicot's original session call for economic development. That move faced and continues to face strong objections from both Racicot and the Democrats, who argue the issues are too complex for a short session and are best left to the 2001 regular meeting of lawmakers.

On top of that, three petitions to further expand the session are circulating. Those petitions would add the recent Montana Power Co. energy sale, state open-pit mining law and state venture capital financing to the docket. In all likelihood, more expansions will be offered.

Mercer says he's not concerned about the session opening up further because the GOP will ensure the Legislature is only there for a short while. If bills aren't introduced in a timely way, he says they won't be dealt with at all.

Racicot first announced March 22, and formally called April 18, plans to hold a session to restore funding for the $13 million in economic-stimulator programs, amid pressure from agricultural, university and business interests. He had vowed up until that time he wouldn't call a session unless and until Republicans and Democrats could agree on a means to fund the projects, which they couldn't.

Members of each party went back and forth for weeks over how to pay for Racicot's economic programs, with neither side willing to budge. Republicans wanted to use incoming coal taxes to pay for the package, while Democrats wanted to use state budget surpluses.

In the end, Racicot decided to use state budget surpluses on a one-time funding basis and allow the next Legislature to figure out a permanent plan. Even though there was general agreement about that plan, it wasn't enough for the GOP.

The governor, in his last year of his final term, says he realized when he decided to call a session there were risks involved. He adds there's nothing unusual about the way the debate over the session and its terms have unraveled.

"There are vagaries associated with a special session that I believe everyone contemplates being possible," says Racicot. "This is a democracy and it appears messy and confusing because, quite frankly, it is.

"It allows all of us to participate, and we do it in a very demonstrative way in Montana."

The conundrum really began last May when the Republican legislative majority crafted House Bill 260, a measure to divert about $15 million in incoming coal taxes every two years for economic development, university research, business recruitment and agricultural enhancement. The legislation went ahead despite objections from Democrats and others who ultimately sued, saying the law was an end run around the constitutional requirement that a three-fourths majority be attained in each house to divert the coal funds.

In January, the state Supreme Court sided with the challengers, declaring the law providing the original financing unconstitutional.

Both sides fault the other for the outcome of the 1999 law and ultimately the need for a special session. Republicans say Democrats were to blame for refusing to support HB 260 and providing the necessary three-fourths vote in each chamber to legally spend incoming coal taxes. Democrats say Republicans are culpable for failing to push a constitutional bill in the first place and now are trying to cover their tracks.

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