The budget that emerged from Montana’s 61st Legislative session is in many ways the essence of political moderation. Lawmakers on the left and right grumbled, and many opposed the budget, but on the 90th day a majority conceded that the old adage about a good compromise leaving everyone somewhat unhappy still rings true – particularly in the midst of a recession.
Lawmakers determined the allocation of roughly $8 billion in state and federal dollars. State spending will increase by 1.6 percent annually over the next two years, less than recent sessions. An ending fund balance of $260 million remains in the bank, along with an additional $100 million fund to cover wildfire fighting and other expenses.
While Republicans fought hard to phase in a voter-approved expansion of the Children’s Health Insurance Plan, Democrats succeeded in getting full funding for the program. Education will also get a 3 percent annual spending increase.
Local governments throughout Montana should soon see the fruits of the federal stimulus bill, of which Montana received almost $900 million. While much of the money is specifically earmarked for roads, bridges and other infrastructure improvements, state lawmakers were able to use some funds to cover needs they might not have been able to backfill otherwise.
Overall, lawmakers went about their business with civility and even camaraderie – two qualities so lacking in the 2007 session that budget negotiations broke down completely, necessitating a special session. The tension and partisan distrust, so palpable during the 2007 session, was notably absent in 2009.
But in the most recent session a different concern persisted as every month brought newly revised estimates of rapidly declining state revenue forecasts. When Flathead lawmakers traveled home during weekends or the mid-term recess, they were greeted by news of mill and plant closures, higher unemployment, increasing foreclosures and other grim economic signs.
If state revenue forecasts continue to decline along their current trajectory, most Flathead lawmakers say there is a very good chance they could be called back as early as the fall to trim the budget.
“The prospects for revenue declines are serious and pretty ominous,” Sen. Greg Barkus, R-Kalispell, said. “If push comes to shove, we could be back here making some pretty serious program cuts.”
Republican Reps. Dee Brown of Hungry Horse and Jon Sonju of Kalispell both opposed the budget and stimulus bills. They anticipate a special session to deal with falling state revenues when current state revenue estimates, while moderate, prove overly optimistic.
“You can’t take that approach in these uncertain times,” Sonju said. “I hope I’m wrong.”
Sen. Ryan Zinke, R-Whitefish, noted that while the $260 million ending fund balance puts Montana in better shape than many states, it’s unlikely that cash cushion can make up for ongoing revenue declines. And if more cuts are called for, accepting the federal stimulus dollars limits which social programs can be reduced, leaving only core programs to cut.
“If we go further it’s going to create a lot of problems,” Zinke said. “A lot of things are off the table.”
Rep. Mike Jopek, D-Whitefish, is more optimistic, and believes some indicators show the federal stimulus could be taking effect.
“At least, at a bare minimum, we are beginning to stabilize,” Jopek said. “I’m not really on that same page that the sky is falling.”
Another major issue of the 2009 session was reducing the sting of property tax increases from the most recent reappraisal by the Department of Revenue, a task lawmakers take up every six years. The value of the average home in Flathead County increased 73 percent between 2003 and 2008, and the statewide increase was 55 percent.
Jopek and other Democrats fought to increase state aid programs already in place for the elderly, disabled veterans and other long-time residents suffering from steep increases in the value of their property, but attempts to overhaul reappraisal were unsuccessful. The bill that emerged mostly continues how property reappraisal has been conducted in the past, according to Sen. Bruce Tutvedt, R-Kalispell, leaving aid programs untouched. But Jopek called that bill, “the failure of the 61st Legislature.”
“It’s going to hit the elderly, the working poor homeowner and disabled homeowner the hardest,” Jopek added.
Flathead County residents will see their state property taxes rise about 1.2 percent over the next two years, according to Tutvedt, and 7 percent over the next six years, but lawmakers have the opportunity to alter the bill in the 2011 Legislature based on market conditions.
“I believe in Flathead County we’re going to find that we were significantly over-valued,” Tutvedt said. “If the values have decreased, we can come back and fix it long-term so we won’t have these big herks and jerks.”
Barkus and Rep. Cheryl Steenson, D-Kalispell also managed to wrangle enough state and stimulus dollars together so Flathead Valley Community College will receive more than $1.6 million to help relieve tuition increases and about a half-million in stimulus dollars for facilities.
As for what this Legislature means for the next election cycle, it remains to be seen what battles of the session will end up as campaign issues. With Barkus term-limited, Sonju said he intends to run for the open Senate District 4 seat, so one major race in the Flathead is already shaping up.
But while finger-pointing over key issues in the most recent session is already underway, the economic landscape over the next two years, and how well lawmakers assessed it, is likely to determine whether Democrats and Republicans look back at the 2009 Legislature and call it a success.
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