The big state budget bill landed on Governor Steve Bullock’s desk Monday, one of the final acts of the 2017 legislative session, which was gaveled to a close Friday.
MTPR’s Capitol Reporter Corin Cates-Carney joins us for a look at what Montana lawmakers did and didn’t accomplish since convening in January.
Eric Whitney: The big story out of this legislative session is the last minute failure, for the third session in a row, of an infrastructure spending bill, right?
Corin Cates-Carney: Yes, that's one of the takeaways. Republicans leaders came out of the session claiming a win by holding state government in check in a tight budget year; rejecting not only that infrastructure bill that would have allowed the state to borrow money for big capital projects, but also a series tax increases proposed by Democrats and the governor.
EW: That infrastructure bill would have spent about $80 million, right?
CCC: Yes, Democrats and some Republicans wanted it to fund maintenance projects at schools, highways, and to launch construction of a state veterans home that the federal government is expected to pay for later. It also included another public works package to fund rural water projects.
EW: And the session ended with Republicans and Democrats pointing figures across the aisle, saying each other's political tactics killed a potential compromise.
CCC: That’s right. But at an end-of-session press conference, Republican Speaker of the House Austin Knudsen said even without the infrastructure package, his caucus did good work, and allocated significant money for infrastructure projects, even during a time when the state isn’t bringing in the money lawmakers thought:
“I think overall, Republicans have a lot to be proud of," Knudsen said. "We crafted a very austere, tight, budget in a very difficult budget session. We came in here being told we had a $300 million surplus when we showed up and that was not exactly the case. You know that is our constitutional job, craft a budget, craft a good budget, for the state for the next 2 years."
EW: Knudsen is referring there to the decline in state revenues over the last year. That’s largely been attributed to declines in coal, oil, gas and agriculture sales. How did that play out over the session, and where’s the budget now?
CCC: So, when lawmakers came to Helena in January, state revenues had fallen more than $230 million below projections.
The governor’s office wasn’t required by statute to make any reductions to spending while that was going on, and to make up for the budget shortfall, Governor Bullock proposed a budget with new taxes and a small increase to state spending in the next two years.
EW: And Republicans rejected those proposals, right?
CCC: Right, for the most part. The Republicans in the Legislature didn’t have much of a stomach for new taxes, what the governor’s office calls revenue enhancements. In an end of session speech, Bullock criticized Republicans for turning down a proposal to bring more money into the state by increasing the tax rate on people making more than half a million dollars a year:
“And the fact that someone making minimum wage has the same highest tax rate as someone making a half million dollars a year, when we need, and should be funding essential services; when there are things in this budget, in this proposal that could actually impact folks out there; that they call that a victory, not working on tax fairness. I’ll leave that to the folks who make over a half million dollars a year to high-five with them, but I think Montanans expected more,” Bullock said.
Republicans also rejected increasing taxes on cigarettes and alcohol.
EW: Did the legislature approve any new taxes?
CCC: Yes. A 6 cent per gallon gas tax was sent to the governor’s desk Monday. If the governor signs it, that tax will gradually be implemented starting this July, and will fund highway and road maintenance. The bill is a compromise between Democrats and Republicans, down from an original 8 cent per gallon tax increase. The governor’s office supported the original bill, and is expected to sign this lower proposal.
A tax on medical marijuana is also awaiting a decision from the governor. That proposal will tax providers gross sales at 4 percent this July and drop down to 2 percent a year later. Lawmakers rejected a 6 percent sales tax proposed by the governor.
EW: And the medical marijuana tax that did pass will fund the regulation for the state’s new system approved by voters in November, right?
CCC: That’s right.
EW: During the election last year we heard quite a bit from candidates about the future of Montana’s energy economy, particularly the future of the coal-fired power plant in Colstrip. Did the Legislature work on that?
CCC: There was a lot of debate, and a lot of lobbying, over the last few months about what’s going to happen when parts of the electricity power plant in Cosltrip shut down. That’s scheduled for 2022, at the latest as required by a lawsuit settlement between the plant's owners and environmental groups.
One proposal, which is heading to the governor’s desk, would give allow the state to give up to $10 million a year in loans to the power plant operators to help them stay open for as long as possible.
The key effort from Colstrip Senator Duane Ankney, which he’d been working on since the Cosltrip shut down’s announced last year, failed to pass out of committee. He said shortly after the vote to kill the bill that it was a blow to the people in Colstrip:
“It would have given them some hope. And right now, to them, it looks like the state, you know, turned her back on them,” Ankney said.
Opponents of Ankney’s bill said it would have hurt the state's business climate by requiring power companies in Colstrip to pay an exit tax when they leave the state.
EW: Were opponents to Ankney’s bill mostly from one party?
CCC: The bill passed with near unanimous support in the Senate. But it failed pass out of a Republican controlled House committee.
EW: What were the issues that received bipartisan support over the session?
CCC: Both Republicans and Democrats worked together to improve Montana’s foster care system after reports came out last year about the health department really struggling with rising numbers of child abuse and neglect.
Reform in the justice system also got a bipartisan lift during the session. Lawmakers also agreed to fund additional judges in the state to keep up with rising caseloads.
House Minority Leaders Jenny Eck congratulated both sides of the aisle for their work on the issue on the last day of the session:
"That’s about a dozen bills that make our system smarter and more just, saving money and giving judges and prosecutors more tools to give defendants the right sentences, help reduce recidivism, and make sure we use the prison system for the people that need to be there the most," Eck said.
EW: Do you have a sense for whether the actions lawmakers took to address the growth in caseloads in both foster care and the courts will be adequate to meet the challenges?
CCC: I think that’s something we’re going to have to wait and see. One of the bills lawmakers passed requires more studying of child abuse in the state and how the state can improve its system. It’s an issue that’s impacting the Department of Justice, burdening judges with cases that take a long time to resolve . It’s a huge lift the workers in the state health department, which is needing to upgrade its case filing system because what they have now is antiquated. We may see some improvement based on lawmakers work this session, but it’s unlikely they’ve come up with a complete fix at this point.
EW: What about some of the major disagreements of the session? What weren’t Republican and Democrats able to accomplish?
CCC: Under the surface of a lot of the policy and appropriations debate, Democrats and Republican each had their own frustrations accomplishing some of their goals over the session.
For Republicans, that frustration was often rooted in not having power in the governor’s office. The GOP has strongholds on both Houses, but ultimately whatever they pass has to win Democratic Governor Steve Bullock’s signature.
In a final speech on the House floor last week, Majority Leader Ron Ehli made note of the governor blocking their goals:
“We fought for the life of the unborn child, the sanctity of life, and the future of our very existence,"Ehli said. "We defended our constitution, our second amendment rights, with numerous bills that unfortunately didn’t make it across the desk, but we must fight for every session."
For Democrats, they didn’t get the funding in the state budget they wanted, practically in the state health department and education.
Governor Bullock didn’t get the full funding for state preschool he campaigned on and pushed for with other Democrats, but a compromise was reached with Republicans for a $6 million preschool pilot project over the next two years.
The collapse of infrastructure negotiations on the final day of the session was a frustration to both sides of the aisle and the governor's office. Bullock was visibly upset in a press conference after learning the public works package failed.
EW: Now that lawmakers are gone from Helena, what’s the status of legislation at the governor’s office?
CCC: When the session ended last Friday, more than 200 bills were in the process of moving to the governor’s office. The big one being the state budget, which was officially sent to Bullock’s desk Monday afternoon. Since the $10 billion budget passed out of both Houses, the governor hasn’t said much about what he’ll do with it. It comes in a little lighter in spending than Bullock asked for, but the governor has been less critical of it than fellow Democrats in the House and Senate. Bullock now has 10 days to sign it or give it a veto.
EW: The governor also has some leeway to veto parts of the budget bill he doesn’t like, right?
CCC: Right, the governor can line item veto parts of the budget he doesn’t like. But he can’t add more money into it. At this point, because the session has ended, if Bullock does veto parts of the budget, lawmakers would be sent Bullock’s rejection in the mail and it would require two thirds response to overrule Bullock’s veto.
