Montana’s looming two-year budget cuts will top the agenda when the Legislative Finance Committee convenes in Helena Wednesday for a two-day meeting.
This 12-member panel— half Democrats, half Republicans, half Senate, half House – should be the catalyst for solutions to the revenue shortfall.
Democratic lawmakers are seeking a special legislative session to stave off some cutbacks with tax increases. Gov. Steve Bullock, a Democrat, has authority to call the Legislature into a special session, but has said it wouldn’t be worthwhile unless Republicans have agreed to support some revenue-raising legislation.
A number of GOP lawmakers have denounced “permanent” tax increases, but what about temporary raises? How about modest increases in designated revenue streams that would expire in two years or so?
“I will not support permanent tax increases during these down times,” Sen. Llew Jones, R-Conrad, chairman of the Senate Finance Committee, wrote in a Sept. 13 guest opinion. Jones’ opinion made clear that his preference is for Bullock to cut spending.
The suddenness and the magnitude of the projected shortfall would require deep cuts if no additional revenue is approved.
The Legislature approved the budget at the end of April and Bullock signed it in May. By June, actual revenue data was showing that the budget revenue estimate was too high. That shortfall immediately triggered cuts mandated in Senate Bill 261, another end-of-session measure. The SB261 cuts will slash some mental health services by half and reduce the rates Montana Medicaid pays for most other health care by 2.9 percent.
Then the state caught fire. With state costs of nearly $60 million, Montana already has burned through its entire wildland firefighting budget for this year and most of next.
Actual general fund revenue collections continued to underperform the budget estimate, so Bullock asked state agencies that receive general fund money to prepare plans for cutting 5 percent of their budgets, then he asked for plans to cut 10 percent — the maximum a governor can cut the budget without getting legislative approval.
Montanans can see those proposed cuts online now. If Budget Director Dan Villa’s most recent revenue estimates are accurate, the entire 10 percent cut will be needed to balance the state budget as required by Montana law.
Any lawmaker who believes that the lists of proposed 10 percent cuts fail to identify the least impactful reductions to reach the $229 million total should present alternatives now.
The only Billings lawmaker on the Legislative Finance Committee is Rep. Kelly McCarthy. A Democrat and member of the House Appropriations Committee, McCarthy has suggested “there is merit in instituting some temporary revenue measures.”
“We still do not have a perfect understanding on why personal income receipts missed their mark so significantly, so it would seem practical not to institute any permanent solutions to a problem that we don’t yet have a firm grasp on,” McCarthy wrote in a guest opinion last week.
Meanwhile, public safety, health and education are in jeopardy. Our already understaffed prisons and state hospital can’t safely operate with fewer workers. Montana businesses that contract with the state can’t immediately absorb reductions in state reimbursement without laying off their staff. Health and human services will serve fewer elderly, children and disabled folks because those are the groups primarily served. The magnitude of cuts is staggering because the budget was already tight when the Legislature passed it.
Bullock can’t save all the essentials that are now on the chopping block. A solution demands the cooperation of a majority of the 150 lawmakers and the governor.
We call upon all those lawmakers to be part of the solution. Don’t force vulnerable Montanans to suffer because the biennial budget got the revenue estimate wrong.