Updated 7:00 pm
Some Republican legislative leaders are now saying Montana will need a special session to deal with the state’s current budget crisis, and that they may bring debate of targeted, temporary tax increases.
Hamilton Representative Nancy Ballance joined several other Republicans on the Legislative Finance Committee yesterday in saying that the state needs to pay for this summer’s firefighting costs.
“I think the likelihood of a special session is high. But from our perspective that would be restricted to fire costs,” she said.
While willing to talk about a potential temporary, narrowly targeted tax increase, Republicans say the state must find creative ways of filling the state’s budget deficit including potentially borrowing money or leaving less money in the state’s rainy day fund.
Ballance says many in her party will not want any kind of new tax.
Miles City Republican Eric Moore, who also sits on the finance committee, says while budget cuts will hurt people, so could raising taxes.
“I think it is well for the committee and the state and the governor to consider the plight of those who we are considering raising taxes on too," Moore said. "These are real people we are considering raising taxes on and they don’t have a lot of money to spend on extra taxes. I think it is important to see the other side of the coin as well , and we need a balanced approach to get through this, until times are better for all of us.”
Governor Steve Bullock has previously hinted at a special session, saying lawmakers should consider tax increases to help balance the state budget, which is estimated to be more than $220 million in the red. The budget lawmakers passed and Bullock signed this spring over-estimated incoming state revenue and didn’t contemplate nearly $70 million in wildfire expenses.
A statement from the governor’s office issued yesterday afternoon did not give a timeline for when Bullock may call a special session.
Members of the Republican majority in the House and Senate still oppose permanent tax increases.
The legislative leaders’ response follows two days of hearings on Governor Bullock’s proposal to balance the state budget. Yesterday leaders from both parties said the plan would harm Montana’s most vulnerable people and potentially shift costs without saving money.
On Wednesday, dozens of people lined up to protest the proposed cuts to the state health department and other programs.
Yesterday afternoon the Legislative Finance Committee approved a letter to the Governor urging him to reconsider parts of his proposal to cut 10 percent from most state agencies. Those cuts add up to more than 200 million dollars in reduced spending.
“I don't think the that majority of folks anywhere in this committee or across the state believe that this ten percent cut, this full ten percent cut, as presented is realistic," Conrad Republican Senator Llew Jones said. "Obviously it will be some subset of this cut that the executive will arrive upon, potentially half, or somewhere in that area. And then we are going to have to look at other areas.”
Jones and other members of the committee did not specify exactly what those other areas might be, but lawmakers left the door open for Bullock to call a special legislative session.
Regardless of how it happens, state law requires lawmakers and the Governor to come up with a balanced state budget. Right now, there's a projected $282 million dollar revenue shortfall from what was planned in the state budget passed this spring. The problem is compounded by firefighting expenses this summer.
Both Democrats and Republicans in the legislature say the governor’s current proposal isn’t going to do the job.
The Legislative Finance Committee is requesting the governor prioritize paying down the state’s fire bill and minimize cuts to programs that help vulnerable people.
Committee Chair Nancy Ballance says several of the governor’s proposals to trim the criminal justice system, department of natural resources, and health department could end up costing the state more in the long run.
“What we don’t want to see is cuts prevent those savings from occurring," she said. "So we make cuts and continue business as usual and don’t get the savings, doesn't’ make sense either.”
Lawmakers’ recommendations to the governor do not single out specific cuts proposed to state agencies. They generally ask the governor to reconsider the current proposal.
State law gives Governor Bullock the authority to proceed with his proposed 10 percent cuts without legislative approval, or find an alternative solution.