Tally on Final Montana Budget Shows Increase After Vetoes

By Beacon Staff

HELENA – A new tally taking into account Gov. Steve Bullock’s vetoes shows that spending of state money is expected to go up about 11 percent over the next two years.

The updated figures reflect cost-cutting vetoes issued by Gov. Steve Bullock earlier this month. Lawmakers are being polled through early June to determine if there is two-thirds support to override any of the vetoes.

Most of the state’s two-year $11.4 billion budget — up 4 percent over the last budget — comes from federal money that fluctuates with big programs like Medicaid.

The Bullock administration said Thursday that the budget increases spending of money from state taxes by 11 percent to a total of $4.3 billion for the two year budget that starts in July and ends in June of 2015. The administration points out that the year-over-year increases are not as dramatic — 6 percent in 2014 and 1 percent in 2015.

The calculated increase compares the figures budgeted in the biennium ending this June compared with the budgeted totals after the governor’s vetoes. Almost half of the spending increases are the result of pay raises for state employees, many of whom hadn’t seen a general pay hike in more than four years, and a fix for a beleaguered public employee pension system.

The Bullock administration said the increase could have been diminished if lawmakers hadn’t failed to pass the bonding bill to pay for new education buildings. The Legislature instead decided to use money from state coffers to pay for the projects.

“If legislators had followed the governor’s budget and bonded more projects, our spending would have been reduced and we would be doing what every other forward thinking business in Montana is doing right now — which is taking advantage of incredibly low interest rates to invest in and strengthen their business,” said Dan Villa, the governor’s budget director.

Villa also pointed out that the budget suggested by Bullock in January spent $31 million less in general state tax money than what lawmakers handed Bullock last month.

Conservative leaders who opposed most versions of the budget, which was largely advanced by minority Democrats with the help of some Republicans, argued that spending is increasing too much by any measure. Some legislative estimates have placed projected spending over the next two-year budget up as much as 13 percent, depending on estimates used.

“It is far in excess of the growth in our economy and our population,” said Senate President Jeff Essmann of Billings. “It means that government is getting bigger in relationship to the private sector. At some point the horse is going to get tired of pulling the wagon.”

If lawmakers override any of Bullock’s vetoes, which is unlikely given the high threshold required for support, the spending total could fluctuate a little.

Bullock argued his vetoes, including some proposed tax cuts, were needed to ensure the state’s projected surplus stays above $300 million. He also vetoed spending measures, saving the state money.

The administration’s analysis of the effects of his vetoes places estimates that projected surplus could reach $310 million. Legislative staffers, who use some different assumptions, are predicting $297 million.

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