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Democrats Trying to Marshal Support for Special Session in Helena

Bullock is recommending cutting $229 million in general fund spending to deal with lower revenues

HELENA — Montana Democrats are trying to marshal public support for a special session to address the budget shortfall while Republicans argue state government needs to live within its means.

The governor’s budget director is recommending cutting $229 million in general fund spending over the next two years to balance the state’s budget, which is coming up short due to a costly fire season and lower revenues than expected. Some of the proposed cuts will lead to corresponding reductions in federal money.

Gov. Steve Bullock told editorial boards at the Bozeman Daily Chronicle and the Flathead Beacon last week that without a way to generate new revenue, the cuts are going to hurt vulnerable residents.

“My job is to manage the budget in good times and in bad,” Bullock said. “But I didn’t sign up to hurt people, which is what these cuts are going to do unless we work together and figure something out.”

Bullock said that he needs Republicans to agree to consider raising revenue before it makes sense to call the Legislature into a special session.

The governor asked lawmakers to increase state taxes on tobacco, wine and medical marijuana, increase the bed tax and create a new tax bracket for those with taxable incomes above $500,000 a year. The Republican majority rejected those suggestions during the 2017 session.

Lawmakers on both sides of the aisle have expressed their views in guest opinions in state newspapers.

Democratic Rep. Jenny Eck of Helena decried potential “overwhelming” cuts to Medicaid rates that would “devastate” rural hospitals, nursing homes and services provided to the elderly and disabled children. She said cuts to the state hospital and the prison system and closing the Billings crime lab are short-sighted and reduced funding for the Montana University System could lead to another tuition hike.

Other recommendations include holding vacant positions open, mandatory furloughs, eliminating some jobs, reducing payments on outside contracts, cutting travel and training, reducing grants and some scholarships, closing some small satellite offices and delaying computer and other equipment replacement.

Eck charged that Republican lawmakers are protecting tax breaks for out-of-state corporations and multi-millionaires at the expense of Montana’s working families.

“What’s become painfully clear in the past few weeks is that when Republican legislators crow about not raising taxes, they are actually just punting,” Eck wrote “They leave it to local schools and local governments to increase your property taxes. They increase your daughter’s college tuition. They force you to pay more for you mother’s home health care or your son’s autism therapy. They cut salaries for the state prison’s security guards and make it harder for child protection workers to do their jobs.”

Democratic Rep. Kelly McCarthy of Billings suggests some temporary tax increases that would be eliminated after a budget stabilization fund created by the 2017 Legislature is adequately funded.

Republican Sen. Llew Jones of Conrad, chairman of the Senate Finance and Claims Committee, wrote that “tightening the government’s purse strings is the place to begin.”

Jones said Bullock “needs to select cuts that have the lowest impact possible on current government employees. In these tough times, he needs to be fiscally prudent and make the difficult decisions expected of a leader. I will not support permanent tax increases during these down times.”

The governor has the authority to approve a 10 percent cut in state general fund spending. Democratic Sen. Dick Barrett of Missoula has noted that nearly all of that is needed to meet the projected shortfall, leaving no room for the governor to pick and choose.

Republican Sen. Duane Ankney of Colstrip, also on the Revenue committee, said that the governor could make some cuts while waiting for more information on the state’s revenue. As projections progress, a special session may be needed, he said.

“I’d be perfectly clear that there isn’t a need at this time for a special session,” Ankney said.

The Legislative Fiscal Division is releasing its analysis of Budget Director Dan Villa’s recommended cuts on Friday. The Legislative Finance Committee will take up the issue next week and make its recommendations.

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