The Montana State Fund is suing to block a $30 million patch to the state budget passed by lawmakers last week. Attorneys for the state fund say the bill, currently waiting on the governor’s signature to become law, is unconstitutional.
The state’s largest worker’s compensation insurance provider is challenging the bill Governor Steve Bullock requested heading into last week’s special session. It would charge a 3 percent fee on Montana State Fund assets above a billion dollars. The money would be used to fill the state’s projected $227 million budget shortfall. But, it was not without opposition.
"This bill has problems. Number one, it’s unconstitutional," said Rep. Greg Hertz, a member of the Republican leadership.
Hertz argued against the legislation on the House floor before it passed with more than two dozen Republicans opposing it.
In their lawsuit, attorneys for the State Fund make a similar argument. The lawyers write that the money collected by the Montana State Fund "may not be used for any other purpose and may not be transferred by the Legislature to other funds or used for other programs."
But, state district court judge Michael McMahon, who is overseeing the case, appears skeptical. Soon after the lawsuit was filed, McMahon denied Montana State Fund's request to block the legislation until the court reaches a decision.
"The Court is concerned whether Montana State Fund has established a legitimate cause of action or that it is likely to succeed on the merits of its claims," Judge McMahon wrote.
The plan, passed by lawmakers to patch the projected quarter-billion gap in the Montana budget, relies on being able to impose the new 3 percent fee on State Fund assets over a billion dollars. If courts throw it out, it could mean additional cuts to state agencies.
Last week, Governor Bullock issue $75 million in cuts in order to help balance the budget.
The Montana State Fund will appear in Court on December 4 to argue its case.
