State House Endorses Budget Deal in Initial Vote

By Beacon Staff

HELENA – A budget deal between Gov. Brian Schweitzer and Republican legislative leaders cleared a key hurdle Tuesday, while a small pay raise for state workers was again shot down and a plan to build $100 million worth of construction projects around the state limped toward a final vote.

The House endorsed the main budget deal in a test of House Speaker Mike Milburn’s ability to rally his 68-32 Republican supermajority, as Democrats stung by earlier votes refused to support the plan. Legislative Democrats didn’t have a seat at the table during negotiations between Schweitzer, Milburn and Senate President Jim Peterson.

Many fiscal conservatives were not pleased with a compromise they believe spends too much, so Republican leaders were under pressure to ratify the budget compromise.

The amendments Schweitzer put onto House Bill 2, the main budget bill, as a result of the negotiations shows it spends about $93 million less in state tax money than he originally proposed in December. It increases spending of state tax revenue, usually the money lawmakers are most concerned with, by about $35 million from the budget Republicans gave him two weeks ago.

Republican leaders told members of their caucus that estimates show the budget deal cuts spending of that “general fund” money by more than 6 percent, compared to the current two-year budget period that ends in June.

But the budget deal fully restores about $100 million in federal money for programs largely aimed at the needy that Republicans tried to cut — prompting some in the GOP to oppose the compromise.

Rep. Walt McNutt, of Sydney, told Republican colleagues that rejecting it only gives Schweitzer more power since it would likely lead to a special session at his call. Lawmakers have four working days left before the 90 days constitutionally granted to them run out.

“I believe this is the best it is going to get,” said McNutt, a veteran of many legislative sessions. “It will not get better if we want to prolong this. I guarantee you that you will spend more money, and I don’t think you want to do that.”

Attention turns to the Senate, which is scheduled to take up the matter after a final House vote Wednesday morning. The upper chamber faces the same issue, where it was unclear if enough fiscal conservatives will support it in the absence of Democrat support.

Democrats, some Republicans and business interests were dealt a setback Tuesday when the House only offered modest support for their proposal that the state borrow $100 million to build projects around the state, mostly college buildings and a new state history museum in Helena.

The House’s 57-42 vote fell short of the two-thirds required in a final vote to borrow the money, but supporters were rallying in hopes of securing 67 more before the final vote. Republicans hold a 68-32 supermajority in the chamber, so the plan needs widespread support from the GOP if it is to succeed.

Strong support has come from builders and contractors around the state, a traditional GOP ally.

“Our contractors are craving for work out there. This is as soft as they have seen in this state in decades,” McNutt said in floor debate. “This is going to have returns for this state for many years — many, many years.”

Republican opponents argued the state should not take on debt that would be paid back over 20 years at an interest rate expected to be a little over 4 percent.

“As much as I would like a job, I wouldn’t want it at my neighbor’s expense 20 years down the line,” said Rep. Bob Wagner, R-Harrison. “Credit is what has got us into this mess that we are currently in on a nationwide basis, and it only gets worse when the states buy into this credit.”

The House also flatly rejected a small pay increase for state employees, which would have increased pay 1 percent next year and 3 percent the year after. Supporters argued state employees who have faced a pay freeze for several years deserve a small increase that won’t be enough to make up for the rising cost of their health insurance premiums.

Opponents said any pay raise is too much in a troubled economy that has left many in the private sector without a job.

“Let’s talk about the people who have to pay for this,” said Rep. Derek Skees, R-Whitefish. “Don’t additionally strap those folks back home who have to pay for this.”