Regents Warned of “Belt-Tightening” Legislative Session

By Beacon Staff

DILLON – Gov. Brian Schweitzer’s budget director warned the Montana Board of Regents on Thursday that the next legislative meeting would be a “belt-tightening” session and urged campuses to curb energy consumption and better monitor student loan programs.

David Ewer said that if the state’s university system intends to take its proposed $80 million in long-range building priorities to the state capitol, those projects should reflect the governor’s initiative to reduce state energy costs 20 percent by 2010.

The governor’s support, particularly on significant budget items, will be needed if the proposal is to have traction in the upcoming session, Ewer said.

“I urge you to consider energy conservation as a crucial component in your deliberations of long-range planning programs,” he said. “While no money is a sure thing — that’s a legislative prerogative.”

But Ewer dedicated most of his time at the meeting to addressing student loans.

He told regents that they needed to be fully engaged with the nonprofit loan entities the board created more than two decades ago — the Montana Higher Education Student Assistance Corp. and the Student Assistance Foundation.

His remarks came during discussion of the regents’ Montana Student Loan Task Force and its recommendations to improve accountability, governance, transparency and communication with the student loan entities.

“The Schweitzer administration has raised concerns for some time now, and those concerns have centered around the level of risk and style of risk and accountability of MHESAC,” he said.

Ewer noted that in May 2006, MHESAC sold $600 million in non-Montana loans without notifying him. He also mentioned that last fall, the SAF was negotiating a $900 million loan deal with Sallie Mae unbeknownst to regents or the governor’s budget office.

“This report didn’t come out of nothing. It came out of something,” said Ewer, who called on regents to “re-engage” and fully participate to keep track of MHESAC activities on a regular basis.

Regent Stephen Barrett of Bozeman said the recommendations of the Student Loan Task Force are a work in progress and the document dedicates itself to addressing Ewer’s concerns.

As part of the new changes, Barrett said, the board will have a standing agenda item to talk about student loan issues and MHESAC updates. The topic will be discussed at every future board meeting.

Ewer also said the state will end the current two-year budget cycle next summer with only $125 million in its checkbook. Economic trends are in a downturn, so the state can’t expect the dramatic economic growth it has enjoyed the past few years to continue, he said.

While Ewer spoke, the University System’s budget expert, Mick Robinson, estimated it would take about $60 million in state money for the next two years just to cover inflation and pay raises and keep current programs going.

That’s not counting more than $40 million in new spending the regents would like the governor to build into his 2009-2011 budget to improve the University System.