The Montana Example

By Beacon Staff

Montana is making national headlines lately, and for a very proud reason: We are one of only two states in America operating without a deficit.

The state of Montana has balanced its checkbook five years in a row with no tax increases, no cuts to education or other essential services, and with $327 million in cold hard cash left in the bank. The Wall Street Journal, New York Times, FOXNews, MSNBC and CNN (among others) have all taken notice, describing our work as a national example of fiscal discipline.

When people from out-of-state ask me why Montana is doing so well, I say it’s because we’re running government like a ranch.

They think I’m joking when I say that. I’m not. Since ranching is what I knew before running for governor, my administration uses the same basic common-sense principles that a rancher or farmer (or for that matter, any small businessman or household) must use in order to survive. It works surprisingly well.

The rules are:

1. Keep some grain in the bin. A few years ago when the economy was strong, like other states we ran a surplus. We sent part of that money back to Montanans in the form of a $400 tax rebate – the largest tax relief in Montana history – and then put the remaining $250 million in the bank. That money has allowed us to get through the recession in solid shape. Contrast this to the behavior of 48 other states, not to mention the federal government. When they had extra cash, they found ways to spend it. Now they are raising taxes or borrowing money – or both.

2. Live within your means. When the recession hit, I told my cabinet members to cut their agency budgets by 5 percent. Families and businesses are cutting back and the state of Montana should be no different. But we didn’t cut essential services. We looked for ways to save money by simply doing things with greater efficiency – and it worked. As a result, those agencies are now providing the same essential services to Montana citizens – whether fighting forest fires, printing hunting licenses, paving roads or imprisoning criminals – for 5 percent less than before.

3. Challenge every expense, and do more with less. Where did we find these savings? It wasn’t easy. We spent five years coming up with ideas. We reviewed every single item that the state spends money on, and if we were buying something for 5 cents we tried to get it for 4. In all, we trimmed about $80 million in costs.

We replaced employee travel with video-conferencing. We demanded rent reductions from our commercial landlords, or in some cases simply moved to cheaper premises. We turned down thermostats, auctioned off state vehicles, and stopped printing unnecessary items that can be viewed online, like the state phonebook or the Revenue Department tax booklet. We even had a contest in which we solicited ideas from the public, with the winner receiving a shiny new coin made of Montana palladium.

And even though the state workforce was already very spare (this decade, Montana’s economy has grown 65 percent while the number of state workers has risen only 2.3 percent), we reduced it further by leaving jobs vacant if someone retired. We also froze state pay, and to set an example the lieutenant governor and I cut our salaries by $17,000.

4. Don’t waste your time with people who say one thing, and do another. If someone knocks on your door this fall looking for your vote and taking credit for our solid financial shape, make sure you do your research. In the last several legislative sessions I’ve vetoed about $40 million in spending bills. And back when we set aside the surplus to prepare for an uncertain future (that safety cushion which has kept us afloat while almost all other states are drowning in red ink), Republican legislators loudly criticized me for it.

Now, even their own party leaders in Washington, including Newt Gingrich and Denny Rehberg, are praising us for what we did.

5. Don’t rest on your laurels. Just because we have one of the most efficient state governments in America, don’t think we aren’t still working every day to cut costs. In fact, I want your help. Go to www.governor.mt.gov and give me your own savings ideas, so that Montana can keep showing the rest of the country how it’s done.

Brian Schweitzer is the Democratic governor of Montana.

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