Analysts: Schweitzer’s Budget May Shortchange Public Services

By Beacon Staff

HELENA – The Montana Legislature’s fiscal analysts find that Gov. Brian Schweitzer’s proposed state budget may leave some public services short of money to sustain them.

Declines in projected state revenue for the upcoming two-year budget period led Schweitzer to rewrite part of the budget that he proposed on Nov. 15, a deadline set in state law. In mid-December, his revised budget cut $144 million in proposed spending from the general fund, state government’s main operating account.

Schweitzer has proposed a $3.8 billion general-fund budget for the two years, 7.4 percent greater than spending for the current two-year cycle.

His budget will be examined and likely changed by the Legislature, which convenes on Monday for a session lasting about 3½ months.

In a report, the Legislative Fiscal Division indicates Schweitzer’s budget may not reflect the full impact of an economic downturn. The report also suggests that during a difficult economy, demand for government services may increase beyond levels anticipated in the budget.

The governor’s budget director, David Ewer, said Friday that he did not agree with everything in the Legislative Fiscal Division’s report but did not wish to discuss it in detail before Tuesday. That is when he and Clayton Schenck, head of the Legislative Fiscal Division, are to appear before legislative budget committees.

“We have fully submitted a budget that meets the needs of Montanans and is understandable and presented in a way that people can see how programs can be delivered,” Ewer said.

Schenck’s unit said budget projections for services through Medicaid, the federal-state program of health care for the poor, are “very uncertain” because of the unstable economy and the possibility of increased eligibility for Medicaid.

In the Corrections Department, the legislative analysts said, the Schweitzer budget underfunded the more costly secure slots for inmates and some who ordinarily would be in them likely would have to transfer to less expensive community-based placement.

A worsening economy could reduce projected interest earnings and the income that helps to pay for public education, the analysts said. Covering the gap would further strain the general fund, they said.

The analysts said the extent to which Schweitzer proposes cost-control by leaving some state jobs vacant “constitutes an across-the-board reduction for state agency operations and the impact on programs will vary widely without regard to prioritization of need.” Schweitzer calls for a “vacancy savings” rate of 7 percent, up from 4 percent earlier.

Legislative analysts also warned of several potential state liabilities that loom, including a possible need to infuse state pension funds with cash because returns on investment of the pension dollars declined.

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