In the special session starting with Monday committee hearings, the Montana Legislature and Gov. Steve Bullock need to raise state revenue over the next 20 months, make prudent transfers to the state general and firefighting funds and minimize cuts to public services and jobs.
Under present law, the state of Montana has a $227 million gap between the spending the Legislature and governor approved last spring and the latest projections of how much money the general fund actually will collect.
That will be a tall order for a session that the governor convened with a list of 10 bill requests. Basically, the Bullock Administration is asking the Legislature to close one-third of the gap with fund transfers and a third with temporary increases in taxes on lodging and rental cars. Bullock said he would then close a third of the gap with $76 million in cuts.
Prison escrow cash
A week later, the Republican majority expanded the to-do list to include legislating the governor’s proposed budget cuts, making different fund transfers and reducing the minimum balance requirement for the general fund. The GOP petition for a special session, which was signed by a majority of lawmakers, also includes getting $30 million from the CoreCivic prison is Shelby, changing state health insurance laws, charging new fees to the Montana Health Co-op and Pacific Source for insurance they sell in Montana, and directing “fire fuel mitigation contracts” to private contractors.
Regarding that escrow account with CoreCivic, can the state can access $30 million without locking itself into a too-long or too-costly contract with the private prison corporation? Lawmakers must ensure that the state retains flexibility to negotiate a contract on terms good for Montana taxpayers.
Health care cuts
The budget cuts under consideration in the governor’s call and the GOP lawmakers’ petition aren’t the only cutbacks since the Legislature adjourned in late April. Senate Bill 261, a complex 42-page compilation of budget adjustments for multiple departments, directs the governor to make specific budget cuts if revenues were less than expected by June 30, 2017. For starters, the entire general fund budget was cut half a percent. The new law, which was signed by Bullock and approved by large bipartisan majorities in the House and Senate, directed the governor to cut several million dollars in general funds from the Department of Public Health and Human Services, with the cutbacks being most severe to mental health care.
Complying with the SB261 directive, DPHHS is proposing across-the-board cuts in the rates paid to Montana Medicaid providers. These are deep cuts to rates that already are so low that Montana health care professionals are losing money to serve Medicaid patients. Every $1 cut in state general fund means a reduction of about $2 in federal match — a total $3 loss for the provider caring for low-income kids, elders and disabled Montanans.
Last week, an interim legislative committee lodged a formal objection to those Medicaid cuts. The committee and the hundreds of Montanans who objected to the looming loss of services for frail and vulnerable Montanans are right that the cuts should be stopped. However, Montana law says the state budget must be cut because lower-than-expected revenue hit “triggers” set by SB261. The interim committee delayed implementation, but the amount of cuts to be made by June 30, 2018, remains the same. Lawmakers can ease or rescind the cuts. Doing nothing means that these onerous reductions will occur.
The revenue shortfall is a Montana problem that should unite our leaders to find equitable, prudent, compassionate remedies. We call on Democrats and Republicans to avoid blaming each other. Don’t insist on a “win” for your party at the expense of what’s good for Montana. The only win that counts is maintaining the essential public services that lawmakers already approved in the budget, and doing so with responsible policy changes as quickly as possible.
Safe travels to Helena, lawmakers.