Bonding Bill Fails in Close Montana House Vote

By Beacon Staff

HELENA – The Montana House narrowly rejected Wednesday morning a plan to spur the economy with $100 million in state building projects but gave its final approval to a budget compromise that now faces a tough Senate vote.

The building project bill was supported by Democrats, many Republicans and business interests. The plan authorized the state to borrow $100 million over 20 years at an interest rate of a little more than 4 percent for buildings and renovations around the state, primarily at colleges. The list was topped by plans for a large, new state history museum in Helena.

Authorization to take on the debt fell short of the two-thirds needed, with a 62-38 vote.

The budget bill, called House Bill 2, was approved by the House in a final 55-45 vote, a second floor vote that does not allow for any debate. Attention now turns to the Senate, which will also face difficulty rallying ardent fiscal conservatives to support the compromise negotiated by GOP leaders and the governor.

The budget compromise was announced late Friday by Gov. Brian Schweitzer, a Democrat, and Republican legislative leaders. Each side applauded it as a fair deal that forced plenty of give and take.

“A good House Bill 2 budget is one that no one likes,” said House Speaker Mike Milburn, a rancher from Cascade.

Legislative Democrats, who did not have a seat at the negotiating table, were stung by the rejection of the building program and were opposing the compromise spending package. That left Republican leaders mustering all the required votes from fiscal conservatives who were suspicious of a deal that spends more than many of them want.

Milburn said it is understandable that Democrats would oppose it in an effort to force Republicans to support other bills such as the bonding measure.

“That’s politics,” he said.

The budget deal spends less in state tax money than Schweitzer proposed in December but spends more of that “general fund” money than Republicans proposed in a budget sent him earlier this month. It also restores about $100 million in federal money for programs largely aimed at the needy, a sticking point for some conservatives worried the state is too reliant on federal funding they believe will be cut in the coming years.

Both the House and Senate on Wednesday were signing off on minor changes to the Republican majority’s primary tax cut plans.

One would ask voters in a 2012 ballot initiative if they want a new tax credit tied to surpluses in state coffers. Supporters say it makes sense to return surplus funds before they are spent, while opponents argue temporary surpluses should be kept on hand like Montana did over the past few years to weather the recession with little of the pain other state governments felt.

The other proposal would reduce the business equipment tax and pay for it by abolishing tax credits such as one provided to homeowners for energy efficiency upgrades.

That measure will be going to Schweitzer, who proposed his own business equipment tax cut but did so very differently by getting rid of it altogether for those with less than $1 million in equipment. The GOP plan offers a reduction for all businesses, regardless of their size.

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