By Joseph T. O’Connor ExploreBigSky Editor
HELENA – Brian Schweitzer released his 2015 biennial state budget, the last one in his eight years as Montana’s governor, on Nov. 15, summing up the proposal in three words: “Educate, medicate, incarcerate.”
These categories comprised 87.5 percent of the governor’s final blueprint, which, if approved by incoming Governor-Elect Steve Bullock and the state Legislature, will leave Montana with a budget surplus of more than $410 million.
But that doesn’t seem likely, according to Sen. Jim Shockley, R-Mont., who says the term-limited governor’s budget proposal is merely an outgoing political statement.
“Schweitzer’s budget has no meaning,” Shockley said in an email. “The new governor will have his own budget driven by his political agenda. Until we know what that budget is, and it is getting late, the legislature will not know how to react.”
His final act as governor calls for expenditures in 2014 and 2015 to increase from the last budget by 2.94 percent and 2.62 percent, and revenues to grow by 3.93 and 3.04 percent, respectively.
“All eight of the budgets I’ve proposed have contained the largest surpluses in history,” said Schweitzer, who is leaving office on Jan. 6, due to state-imposed term limits. “We continue to propose a $410 million ending fund balance, which is about 10 times greater than [those] during the previous 20 years before I was elected governor.”
Kevin O’Brien, Bullock’s spokesman, said Schweitzer’s budget has merit, but ultimately the governor-elect will make the call, presenting his budget to the state Legislature by the day he takes office on Jan. 7.
Two of the governor-elect’s proposals, introduced during his election campaign, were written into Schweitzer’s budget. These included a $400 tax rebate for all Montana homeowners, and eliminating an equipment tax for 11,000 small businesses in the state.
“What’s clear,” O’Brien said, “is that Montana has maintained fiscal strength through the Great Recession. Schweitzer’s fiscal leadership has left [the state] in a strong position.”
Two other key issues on Bullock’s agenda – education and job creation – are also contained in Schweitzer’s budget proposal.
“It doesn’t matter if a proposal has an ‘R’ or a ‘D’ behind it,” O’Brien said. “They’ll have a partner in [Bullock], if they [boost] jobs and education.”
Of Schweitzer’s total proposal, education comprises 51.6 percent, giving nearly $2 billion to state programs. Schweitzer said this investment ultimately saves Montanans money, explaining that when state education funding decreases, taxes increase for homeowners and small businesses.
When past governors pulled funding from schools, “every school district turned to their voters and said ‘we’re raising your mill levies,’” Schweitzer said. “They raised taxes locally because the state of Montana spent less money.”
Schweitzer’s proposal benefits both students and teachers, aiming to raise educator salaries and reimburse high school teachers that graduated from Montana colleges up to $12,000 of their tuition.
About $34 million of state funds would go toward the governor’s proposed tuition freeze, which would block college tuition increases for two years.
“We made deals with the Board of Regents,” Schweitzer said, “and they promised that if we put that money in, they wouldn’t raise tuition.”
The proposal allots $67 million to K-12 education, as well.
The “medicate” portion of the governor’s plan, which accounts for more than 25 percent of the total budget, includes giving $1.5 million to programs that aid the elderly, and subsidizing child protective services with $929,000. It also provides 80,000 additional Montanans with medical insurance through the Affordable Care Act, something the governor says is imperative for insured Montanans to support.
“What happens if we don’t cover these folks?” Schweitzer asked. “They’re still getting their health care. It’s just that they’re not paying for it. They go to the hospital in your community [which has to] keep its doors open, so they ship the cost to those of us who do have insurance. We’re actually saving money by joining this Medicaid program.”
Schweitzer also proposed a bonding bill in the budget, which he says would create about 2,100 jobs and cost $87 million.
Of this, $20 million will be spent on upgrades to buildings at Montana State University and the diesel technology center in Havre, where Schweitzer said there’s a “huge demand for people that are trained as diesel mechanics in not just the oil fields, but all across Montana. Instead of importing [trained mechanics], we want to train Montanans to have those skills.”
To pay for the bonding bill, he says, “We have money in the bank. We can pay cash, or we could borrow money at the lowest rates in the last 75 years,” allowing the state to borrow at interest rates “in the low 2s.”
The budget proposal doesn’t include tax or fee increases, although most of the state’s revenue comes from income and property taxes.
Of the 79 bills Schweitzer vetoed in 2011, some were related to Republican-proposed tax increases on homeowners and small businesses, he said.
“In the last Legislative session, they tried to claim that we had a $400 million deficit. And of course I said, ‘We have a $400 million surplus. You guys have been smoking your belly button lint.’”
In 2013 there could again be significant disagreement over the budgeting details.
The 2013 Republican-controlled Legislature may not go along with either Schweitzer or Bullock’s budget proposal.
Additionally, the legislative committee responsible for passing an official revenue estimate, the Revenue and Transportation Interim Committee, is currently gridlocked over the state budget’s revenue estimate.
The revenue estimate is decided on by the committee, which looks at both Schweitzer’s budget and the Legislative’s budget. The committee then passes a revenue estimate. The committee is legally required to pass it before the first business day in December.
As of press time, committee legislators hoped to schedule a shotgun meeting on Dec. 3 to iron out their differences, but it was unclear whether this would happen.
“That is a very bad sign,” Shockley said. “Normally the bi-partisan committee can work it out.”
Schweitzer, for his part, has done his job, he says, by completing his final budget proposal on time, and by keeping what he calls “grain in the bin.”
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