Bullock Prepares for Budget Cuts, Medicaid Debate

By Beacon Staff

HELENA — Montana stands to lose more than $10 million in federal funding and grants if automatic budget cuts go through Friday, but Gov. Steve Bullock says he is not making any changes to his budget plans at this point.

The White House estimates the cuts will cost Montana at least $10.5 million and affect more than 13,000 people in the areas of education, military, health, social services and the environment. The cuts are the result of federal lawmakers’ inability to compromise on a deficit-reduction plan.

If Congress does not pull back from the brink and reach a last-minute deal, there will be real consequences for the state, the new Democratic governor said Tuesday. But Montana is in a strong economic position with a $500 million surplus, and because the cuts would be implemented in stages, there is no need to change any spending plans at this point in his proposed $10 billion budget, he said.

“We’re talking to some of our administrators about what will happen if Congress doesn’t get its act together,” Bullock said. “The craziness is we’ve been on this roller coaster of uncertainty. So even greater than the $10 million is the uncertainty caused when Congress can’t seem to act.”

The looming cuts are one of the unexpected issues Bullock has had to confront in his first two months as governor. He sat down with Montana reporters from The Associated Press to discuss how he has prepared for them and how he has adapted to his new role in the midst of a bustling legislative session.

His first two months have included dealing with Republican legislative leaders who are looking to test him, even as he tries to win over those same leaders to his legislative agenda and his proposal to expand Medicaid to 70,000 additional people in Montana.

Bullock said he has been laying the groundwork for the Medicaid expansion by meeting with individual legislators and business leaders. His pitch: Lives are at stake, jobs would be created and even the staunchest Republican opponents in other states such as Ohio and Florida are now backing their own expansions.

The U.S. Supreme Court ruled in upholding President Barack Obama’s Affordable Care Act that states have the option to expand their Medicaid rolls.

Bullock said he plans to introduce a bill detailing the expansion in the upcoming weeks but declined to say whether he has the votes to pass it.

“I’m not going to count any votes until we see the screens,” he said, referring to the electronic voting boards in the House and Senate chambers.

Bullock’s caution speaks to his experience. Despite pledges of bipartisan cooperation at the legislative session’s opening, several of Bullock’s bills have already been blocked by lawmakers.

They include the centerpiece of his campaign, a $400 property tax rebate for each Montana homeowner, along with a jobs bill, pay raises for state employees and a plan to help military veterans get into college.

Despite the early setbacks, Bullock said his staff meets almost daily with legislative leaders and relations are “cordial.”

He has left the door open to working with legislators on an education plan. He complimented Republican Sen. Llew Jones on the work he put into his own plan to increase school money and cuts property taxes. But the governor is not abandoning his proposal, which he said puts the right amount of investment in schools and in technology.

He was less optimistic about the possibility of combining his property tax rebate plan with a Republican proposal seeking permanent property tax cuts. The Democrat argues the GOP plan would be a multimillion dollar windfall to large corporate property holders who don’t need it.

“I’m always willing and open to having conversations with legislators and doing all I can to meet them halfway, but I won’t do so in a way that ultimately isn’t good for Main Street, good for creating jobs here in Montana,” he said.

One of the more heated issues in the campaign for governor between Bullock and his Republican opponent, Rick Hill, was energy development in eastern Montana, with each man promising to make a better place for coal, oil and gas operators to do business.

Despite that, Bullock said not to look for development of the Otter Creek tracts, the massive coal reserves the state leased to Arch Coal, in the next four years. Much of that has to do with the time it takes to build a mine, he said.

The Tongue River Railroad that would transport the coal to outside markets is moving through the federal approval process, but it still has a long way to go. Then there is the populist opposition in Northwestern states where long trains would haul the coal to export terminals on the Pacific Ocean.

Bullock said the sides are still too far apart in Washington state for him to get involved in those talks.

Total oil production has been trailing off in Montana, while just to the east, North Dakota is in the midst of a boom with the development of the Bakken formation through hydraulic fracturing.

Bullock says the market will drive future development west into Montana.

“I think there (are) good opportunities and if it is done in a responsible manner … we at the state will be a partner in trying to help it occur,” he said.

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