Proposed Montana Budget Cut Likely Just the Start

HELENA – Gov. Brian Schweitzer’s administration told lawmakers Thursday that a proposed 5 percent cut in spending is just the first of many tough budget decisions, but he and other leaders immediately shut the door on talk of any tax increases.

Schweitzer’s proposed cut of about 5 percent to the current budget would be a way to ensure the state makes it through next year with money in the bank.

His budget director, David Ewer, told a legislative panel evaluating the plan that the revenue picture is improving, and the administration believes the $40 million reduction will get the state through the current budget period that ends in the middle of 2011.

But he said the next budget will be very tough. Some projections show the state will have to reduce programs in order to bring them in line with an economy expected to grow slowly.

“It is also appropriate to start managing the expectations of the next session, because the world has changed,” Ewer said. “We together, society, will need to decide what is the level of core services we are going to have. Those core services are public safety, public education and public health.”

Schweitzer immediately shot down any speculation that tax increases could be used to sustain programs. He renewed his anti-tax stance with a pledge to kill any such legislation, if it were to come before the Legislature next year.

“That dog don’t hunt. Not on my watch,” said Schweitzer. “Nope.”

Schweitzer noted it would take a two-thirds majority to override him on such an issue — an impossible hurdle for such a controversial topic.

The strong comments followed a suggestion by Rep. Jon Sesso, D-Butte, that all options, including tax increases should stay on the table as lawmakers craft a budget next year. And advocates suggested at a committee hearing that a tax increase would be better than slicing programs for the needy.

Other leaders also rejected any speculation of a tax increase.

Senate Minority Leader Carol Williams, D-Missoula, said she believes Democratic leadership has helped make Montana one of the few states spared from the worst of the budget chaos seen elsewhere.

Lawmakers will continue to advocate for key services like education and health programs — while balancing the budget without raising taxes, she said.

That means some government programs could face more cutbacks.

“We need today to start letting people know that things will be different,” Ewer told a legislative panel reviewing the proposed cuts. “Those conversations are going to be really robust in the next session.”

The $40 million cut, which Schweitzer said he is still massaging, would reduce increases provided to doctors and other care providers for helping the needy, while cutting at least some from almost every area of state government.

There is one tax increase, although relatively small, that Schweitzer might not be able to do much about. A planned cut of about $2 million from local school district block grants would trigger through existing law an increase in local property taxes to make up the difference, according to budget experts.

The next budget period is expected to be particularly difficult because lawmakers won’t have an infusion of federal stimulus money and a big starting surplus like this time. At the same time, economists have said revenue growth is going to be far slower than in the past.

Schweitzer remained optimistic, even though the economy isn’t growing fast enough to prevent tough budget decisions.

“Next year will be better than this year,” he said. “I guaran-dang-tee it.”