Good and Bad Budget Debates

Let’s take a quick tour of the country to see how budget negotiations are faring elsewhere

By Kellyn Brown

Every other year, the state Legislature convenes and every other year the focus is largely on legislation that divides our two major political parties or, in most recent sessions, the Republican-controlled House and Senate and Democratic governor. That’s for good reason, especially this year – one in which major proposals such as Medicaid expansion and the Confederated Salish and Kootenai Tribes water compact are still at the negotiating table.

But the biggest issue facing our lawmakers often gets less attention, at least compared to other states, even though it’s their sole constitutional duty: passing a state budget. And, in many ways, that’s a good thing.

Sure, as the session slogs to its April finish line, there are disputes over how much money the state should spend and on what. But those debates are unique to Montana for a very important reason; they almost always involve how big of a surplus to leave in our coffers. Let’s take a quick tour of the country to see how budget negotiations are faring elsewhere. It isn’t pretty.

We’ll start in Illinois, which has the lowest credit rating among states and where it will face a $9 billion operating deficit for the fiscal year that starts on July 1, according to researchers with the University of Illinois Institute of Government and Public Affairs. Other estimates peg its shortfall a little lower. Either way, deep cuts are inevitable.

Newly elected Republican Gov. Bruce Rauner has proposed reducing employee-benefits costs, subsidies to local governments, higher education funding and reimbursements to health-care providers to make up $6 billion. Democrats in the Legislature there have opposed the proposal.

Next door in Wisconsin, the state isn’t faring much better. Republican Gov. Scott Walker’s proposal to close a $1.8 billion shortfall has been criticized and led to protests on college campuses because the plan would eliminate $300 million in funding for higher education. It also would cut 28 percent to the state parks system operating budget.

Head to Maryland, Kansas, Pennsylvania, Louisiana, New Jersey, states led by Republicans and Democrats, and the story is largely the same. The Washington Post reported late last year, “at least 16 states are projected to run budget shortfalls in the next year or two.” Many of governors facing deficits didn’t create them, but they will reap the fallout when college is more expensive, roads are unmaintained and social services are no longer available.

True, Montana still has bills to pay and needs to shore up its pension system, which face potential shortfalls in the coming decades. But lawmakers on both sides of the aisle have at least begun looking at the issue instead of punting it to the next Legislature. And as far as a budget deficit, Montana doesn’t have one.

As state lawmakers head into the second half of the session and begin digging deeper into the budget, the discussion about where to spend money and how much to save will be had at once. Gov. Steve Bullock said he wouldn’t sign a bill that doesn’t leave an ending-fund balance of $300 million. Republicans have already proposed modest income tax cuts, which the governor vetoed last week.

Recently, the Tax Foundation ranked Montana sixth among states for its business tax climate. While our politicians disagree on a number of issues, they also continually position Montana to maintain a relatively healthy economic outlook, even during the latest recession.

Every two years, our elected officials in Helena are expected to hammer out a budget deal that doesn’t raise taxes nor create a shortfall. Overall, they’re pretty good at it.

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