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GOP Votes to Expand Special Session

What to watch for as lawmakers return to Helena to fill a steep budget gap

Republican lawmakers in the Montana Legislature on Friday gained enough support to expand the scope of next week’s special session, allowing them to consider options to solve the state’s budget crisis beyond what Democratic Gov. Steve Bullock has proposed.

The expanded agenda will include consideration of accepting $30 million from the owners of the private prison in Shelby in exchange for a 10-year extension of the state’s contract with the company. While the money would offset the amount that lawmakers will have to otherwise cut from state agencies or account for through tax increases and fund transfers, it could stand out as a major sticking point between lawmakers in the Republican-dominated Legislature.

Bullock’s administration opposes renegotiating a long-term commitment with the prison’s owners in such a short period of time and under the pressure of a budget deadline. The company’s current contract with the state expires in 2019.

Bullock announced he was calling the special session on Nov. 6, ordering lawmakers back to Helena in a final effort to plug the holes in the budget.

In making the announcement, Bullock pared back his earlier proposal to cut $227 million from the state’s general fund over the next biennium, which would deal the heaviest blow — 85 percent — on Montana’s most vulnerable populations served by three agencies: the Department of Public Health and Human Services, Department of Corrections and primary, secondary and higher education.

Instead, he is recommending cutting $76.6 million in general fund spending, including $49 million to the Department of Health and Human Services, while raising some taxes on a temporary basis to defray the costs of Montana’s fire season.

He also recommended delaying state contributions to the employee health plan and the judicial retirement system, which are running surpluses.

Bullock’s proposed tax increases include raising the state lodging tax and rental-car taxes to 10 percent, up from 7 percent and 4 percent, respectively, and imposing a $30 million fee on the state workers’ compensation fund’s $600 million investment portfolio.

Speaker of the House Austin Knudsen, a member of the bloc of conservative Republicans, opposes raising taxes, and said the session’s expanded agenda allows lawmakers to look for solutions beyond the governor’s “narrow priorities.”

“Instead of making an effort to reduce government spending, the governor’s first step was to call the Legislature back to Helena to push his agenda of raising taxes, and that lack of leadership is why our budget is in the situation it’s in,” Knudsen said in a statement.

Senate President Scott Sales said the expanded session offers an opportunity to bring more options to the table.

“We’re bringing the offer from the prison in Shelby, additional ideas for transferring funds, and we’re going to make sure that Governor Bullock’s cuts are talked about and voted on,” Sales said. “Before raising taxes or cutting benefits we’re going to look at all functions of government.”

In the Flathead Valley, Rep. Frank Garner, R-Kalispell, said he’s been in daily communications with lawmakers trying to craft a deal, and envisions the final solution borrowing from a multitude of proposals.

“I think there are some people who see an opportunity to use money from the private prison. Thirty-million dollars is a lot of money, and in a year where we are counting every dollar it is a proposal that we have to consider in my view.

But I also see the opportunity for transfers from other funds, and to see if there is an appetite for additional temporary revenues. I don’t think there is any appetite for permanent increases, but temporary increases could help fill the gap. And then at the end of the day there are going to be some cuts. I think we have to be as careful and thoughtful about what those cuts look like, but there will be cuts.”

Sen. Bob Keenan, R-Bigfork, whose legislative track record dates back to 1995, said while he’s returned to Helena for special sessions in the past, they have never been called by a governor of the opposite party.

“A Republican Legislature working with a Democratic governor could get tricky, but honestly I thought the Republican moderates would have a deal worked out by now and they don’t,” he said.

Keenan pointed to the waning days of the 2017 regular session of the Montana Legislature, during which more moderate Republicans broke away from the party and joined minority Democrats, as evidence of what would likely occur in the next week.

“You see those votes turn when things get down to the wire,” Keenan said, noting that members of the GOP’s conservative wing made a gamble when they passed a budget designed to trigger mandatory cuts in the event of a revenue shortfall.

Coming on the heels of a devastating and expensive wildfire season and less-than-projected revenue streams, the gamble didn’t pay off, Keenan said.

“The Republicans spun the roulette wheel and it came out black instead of red. So we are going back for a special session. There are people who took a chance knowing we could hit triggers, and here we are. People are walking away from their lives to solve this.”

The 150 members of the Montana Legislature will return to Helena on Tuesday, Nov. 14, with committee hearings beginning Nov. 13.

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