Montana Budget Picture Starts Shaping Up Amid Cash Shortfall

Republican-led Legislature is seeking to fix a budget shortfall by cutting government spending

By MATT VOLZ, Associated Press
Montana State Capitol. Beacon file photo

HELENA – A new analysis shows the work that the Montana Legislature has done so far this session would end the state’s budget shortfall, but also would leave about half the cash that Gov. Steve Bullock wants in reserve as a cushion against future revenue dips.

The Republican-led Legislature is seeking to eliminate the shortfall without increasing taxes by cutting government spending. Various subcommittees have just completed their proposed cuts to the Democratic governor’s 2018-2019 budget request, and the chairwoman of the House Appropriations Committee said she doesn’t expect many changes to the spending plan in her committee or on the House floor.

“I’m happy with where we are,” House Appropriations Chairman Nancy Ballance, R-Hamilton, said Thursday.

The Legislative Fiscal Division analysis released Wednesday shows budget subcommittees cutting $59 million in general fund spending, or about 1.5 percent, compared to the two-year budget passed in 2015. That’s about $46 million less in state spending, or 1.1 percent, than Bullock proposed in his budget plan.

That reduction to the governor’s plan may not seem like much, but “it is substantially harmful to Montanans,” said Bullock budget director Dan Villa.

“Within that 1.1 percent is a 23 percent tuition increase” for college students, Villa said. “Within that 1.1 percent is a significant cut in senior and long-term care.”

Democratic lawmakers who have tried unsuccessfully so far to prevent the deeper cuts said they will shift their focus in the second half of the legislative session to reinstating funding to education and health and human services programs.

“Those are the two areas where we are seeing the most concerning cuts,” said House Minority Leader Jenny Eck, D-Helena.

The Legislative Fiscal Division’s analysis adds up the initial numbers from the budget subcommittees and the cost of bills that have been approved by at least one committee. The preliminary results show the state would have a $15.8 million shortfall in 2018 but an $81 million surplus in 2019, though analysts note those figures will change as the session progresses.

Under the Legislature’s plan, the state would have $159 million in cash reserves in 2019, compared to the $300 million cushion Bullock is seeking. Bullock has said that leaving a higher amount in reserve is key guarding against future revenue drops such as the one that caused the current budget shortfall.

The cost of bills that have been approved by a committee is $3 million so far, according to the analysis, although Ballance said that amount will increase with more bills passing committees this week.

Villa said his office tracks all active bills, not just those approved by a committee, and the state would have a $13 million shortfall in 2019 if all of them passed.

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