Lawmakers hear plans to spend stimulus money

By MOLLY PRIDDY

Community News Service

UM School of Journalism

HELENA – Legislators got a look today at the bill to spend $800 million in federal stimulus dollars and learned what the state can and can't do with the cash. They also heard the governor’s ideas for spending the money.

The House Appropriations Committee heard two presentations on House Bill 645; one from Gov. Brian Schweitzer’s budget director, David Ewer, and one from the Legislature's own fiscal analysts.

Legislative Fiscal Division staffers said most of the money is headed to programs already determined by the federal government, but lawmakers will still have some say in the spending.

“You essentially have $275 million for your particular priorities with the stabilization funds,” said Taryn Purdy of the Legislative Fiscal Division. She said that money could be used however legislators choose.

There will also be $575 million in tax cuts for Montanans, but these cuts will have almost zero impact on the general fund, according to state financial forecasters.

David Ewer, the governor’s budget director, gave the committee the governor’s recommendations on how to spend the $275 million in discretionary funds.

Many of the projects involved various infrastructure projects that are “ready to go,” Ewer said. The list also contains $43 million for school infrastructure projects, $1 million for anti-meth programs and over $3 million for license plate reissues.

Ewer said the governor’s top priorities are a $250 million ending-fund balance, $43 million for teacher retirement accounts and $60 million for an expected increase in the state's Medicaid caseloads.

The Medicaid money is especially important, Ewer said.

“We need to use at least part of it for that service,” Ewer said. “It is an entitlement, right? We as a state can’t say, currently, no to people. If they enroll, we have to pay.”

Ewer also recommended giving $10 million to the state's colleges in return for their agreement not to raise tuition. Higher education officials may argue that the sum isn't big enough for that, but they will have to figure out how to make it work, he added.

“There are consequences of having that kind of reduction, and we’re not going to raise taxes,” Ewer said. “We believe that it’s reasonable to expect that higher education with these funds could hold a line of tuition.”

Universities and colleges will have to strike a balance between services offered with no tuition increases, Ewer said.

Committee members questioned Ewer about the money set aside for the teacher retirement fund. Rep. Penny Morgan, R-Billings, asked why the governor chose to fund teacher retirement accounts and not the public employee account.

Ewer said the governor chose to fund the teacher account because much of the package focuses on education. He also said it is a good time to invest in the stock market when prices are so low.

When questioned about the governor’s assertion that HB 645 needed to be on his desk by April 3, Ewer said it would depend on the bill’s process. He said the governor wants to be certain about what he’s signing for, so process should be speedy.

Legislators will hear public comment about how to allocate federal dollars on Thursday. Subcommittees on health and human services, corrections, education, transportation and general government joint subcommittees will meet separately to hear about the effect on their sections of the budget.