Where’s Our Money?

Montana’s biennial balanced budget is in trouble and the governor is mulling whether to reduce services or reconvene the state Legislature to find solutions

By Mike Jopek

There’s always money for tax breaks and the chartered jet travel of bureaucrats, but no money for kid’s health care.

Congress allowed funding to lapse for the Children’s Health Insurance Program. It funds healthcare for 45,000 Montana kids.

Congressional Republicans are withholding the $100 million in annual payments to Montana like a hostage, presumably waiting for a deal. Senate hearings on CHIP started last week.

Meanwhile, Congress is scurrying up a $1.5 trillion tax cut. Independent analysis indicates that it would help big corporations and the very wealthy.

Many would see their federal taxes decrease while others enjoy a tax increase. Simpler taxes aren’t always cheaper.

For the past 60 years the federal share of individual income taxes funding our government remained relatively flat. Share of corporate income taxes decreased dramatically while payroll taxes increased proportionally.

Payroll taxes now comprise a much greater proportion of federal revenue than earlier. The shift left workers paying a bigger share than corporations.

Under Republicans’ current federal tax plan, the bottom income bracket sees a $60 tax cut or a 0.4 percent rate reduction, while the top bracket might see a $700,000 tax cut or a 6.8 percent rate reduction.

One in four Americans expect to pay more as tax reform creates winners and losers.

Locally, Whitefish voters approved a $26.5 million bond to build a much-needed elementary school.

Of the 9,500 ballots mailed out, 2,500 were returned and 1,500 voters supported the effort. A $300,000 home in the district can expect a $175 property tax increase annually over the bond life.

Montana’s biennial balanced budget is in trouble. Gov. Steve Bullock is mulling whether to reduce services or reconvene the state Legislature to find solutions. Montana’s Constitution requires a balanced budget. It’s a good thing.

The Legislature skipped town earlier this year after pumping up the state revenue projections by $100 million and transferring half the wildfire fund reserves to pay for other worthy state services.

Now Bullock is faced with making draconian cuts to services while the overall state economy remains strong.

Bullock faults the state revenue shortfall on market prices of oil, coal, and agricultural commodities coupled with the extreme wildfire season and a 14-year-old state income tax cut that reduced the top-tiered tax rate by a percentage point.

Bullock is considering cutting the Department of Public Health and Human Services budget by $100 million, putting child protective services in danger. He is contemplating cutting higher education by $44 million, increasing student tuition.

Earlier, Bullock chopped nearly $19 million biennially from K-12 education. These cuts are routinely transferred to property taxpayers in the form of additional local taxes.

Public services like safety, education, roads, parks and libraries are expensive. Everyone knows it, and everyone hates it. Taxes are too high, yet tax reform means someone else pays. Workers and middle class retirees already pay their fair share.

Bullock has publicly asked state Republicans if they want to convene a special session of the Legislature to temporarily raise cigarette, booze, and tourist taxes to keep from further cutting services to foster kids or college students.

Who knows what the 10 moderate House Republicans decide. Bullock may simply make the budget cuts. It’s not like ultra-conservative legislators would help restore state funding.

Congress currently pays for its huge tax cut by either increasing national debt, conning another taxpayer to pay more, or cutting services to things like Montana CHIP and Medicaid.

If our government has enough money to pay for bureaucrats’ private charter jet flights to questionable places or reduce taxes for our nation’s largest corporations, then it has enough money to place a foster child in a safe home or pay for the health care of poor kids.

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