MTPR

Special Session Recap: Montana's Budget Fix Explained

Nov 16, 2017

The Montana Legislature wrapped up the special session to fix the state’s overburdened budget early Thursday morning. Corin Cates-Carney has been covering the fast-paced developments all week. He’s here with us now to give us highlights from this week’s special session.

Nicky Ouellet: Legislators are trying to make up $227 million shortfall in the state budget. Did they do it?

Corin Cates-Carney: It looks like they have, although there are still several pieces that still need to be answered. A big question moving forward is how will Governor Steve Bullock respond to what lawmakers gave him, as far as legislation, to patch the budget. While there are some aspects of the special session work that everyone can agree really will help the state dig itself of its current budget shortfall, the politics of some of the decisions of the last few days are leaving some, including the governor, disappointed. I have a clip I’d like to play from Republican Nancy Ballance that can help explain the starting point for this debate and the debate to fix the state budget, and why the state is even at this point to begin with.

"There is more than enough blame to go around,  We can point our fingers at each other. Blame. Talk about no trust. I don't think that gets us any closer to a solution. And yes we have a philosophical divide. I heard someone on the other side say the whole point of this session is revenue. Well, our side might say the whole point of this session is smaller government."

CCC: This really illustrates the starting point for negotiations in the special session and debate on how to fix the budget. The two sides of Montana politics looked at the same $227 million hole, but saw very different problems. And that really guided each party's proposals to fix the budget over the last few days.

NO: What are the biggest changes coming out of the session?

CCC: Both the governor and the Republican controlled House and Senate agreed that cuts were going to be a part of the solution. Everyone said coming in that making $227 million in cuts would be too painful for Montanans who use government programs. A lot of people worried about what the cuts would mean for people who rely on state funded healthcare services. So, $75 million in cuts was agreed upon. And that's one pieces of the puzzle to get to $227 million. Another chunk involves moving around funds within state government. That piece of the pie is around $94 million. Also last minute during the session, after some political wrangling, the Legislature approved adding some fees on the state fund for workers compensation. That’s expected to bring in an additional $30 million for the state.

NO: One of the strategies passed during the special session was a deal with a private prison in Shelby. What do we know about this deal?

CCC: This is where the fix for the state budget not only gets more political, but also less clear on how this plan will pan out. All those changes we talked about before to fix the budget, those cuts and transfers, they total less than the total of $227 million. The magic number needed to reach $227 million, is roughly the same amount being tossed around in a potential bailout from the state’s only private prison. Around $30 million. Governor Steve Bullock talked to members of the press Thursday afternoon.

"From my perspective the Legislature fell short of doing everything it certainly should have," Bullock said. "Where we’re a little bit below, I will speak to CoreCivic to see if an arrangement can be made that's in the best interest of Montana."

CCC: Bullock offered some temporary tax increases to a few tourism based sectors like rental cars and hotels to bring more money into the state while revenues were coming in low. Republicans rejected that and are offering a potential deal with the CoreCivic prison in Shelby to make up part of the difference.

NO: This prison deal is drawing a lot of attention, especially during debate in the special session and also on social media. What’s the controversy here?

CCC: From the very beginning of the session, there was no official deal on the prison or offer on the table that was public. Republicans portrayed this as a private prison giving the state $30 million in exchange for a ten year extension of its contract. But it’s a little bit more complicated than that, and the governor’s office didn’t offer any details going into the session about what conversations were or were not going on about the prison. So it’s not clear when, or if an actual deal will be made, or what that deal could look like. The ACLU of Montana was very vocal during the special session in pushing against any kind of deal with the prison. The ACLU says the Shelby prison’s owner, CoreCivic, has a long history of alleged human rights’ abuses. And they say Montana shouldn’t be in the business of sending inmates to for-profit prisons.

NO: How does each political party feel coming out of the session?

CCC: The Republican Speaker of the House told the press he was very happy with how it all turned out soon after it all wrapped up early Thursday morning. Democrats were less excited about the result, but noted that the current proposals will help the state avoid really deep and painful budget cuts that would impact a lot of vulnerable people in the state.

NO: Part of the reason we ended up with this shortfall in the first place is that the state fire fund was drained earlier than expected due to one of the most expensive fire seasons in recent history. For context -- usually the state spends about $22 million a year fighting fires; this year’s fires cost $74 million. Has that dedicated fire fund been replenished, and do legislators think they’ve set aside enough money for next season?

CCC: The fire fund is getting a refill. About $40 million is going back into that fund for the next fire season. That won’t be enough to cover the kind of season like we had this year, but it does put in place money to pay for an above average fire season next year.

NO: So the session wrapped up around 1 a.m. Thursday morning and lawmakers went back home. What needs to happen next? Are these changes a done-deal or does Governor Bullock still need to sign off on the changes to fix the budget?

CCC: All the proposals we’ve talked about still need the governor’s signature to officially become part of the state’s plan to balance the budget. And there’s at least one proposal in there that will likely get a veto. Republicans forced through a bill that would furlough state employees in the executive branch of government. The governor says that likely won't get his signature. Although, with some of the other cuts that were agreed upon by the executive and lawmakers, about 50-100 government workers in the state may lose their jobs. More details on that will come out in the coming weeks. Also, the potential deal with the private prison in Shelby accounts for about $30 million of $227 million plan passed in the session to balance the budget. Republicans have crafted the legislation in a way that it could make it hard for Bullock to get around making the deal. But we’ll learn more soon.

NO: Corin Cates-Carney has been covering the special legislative session to fix the state’s budget shortfall. Corin, thanks for catching us up.