Legislative leaders announce deal on K-12, CHIP

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – After a long night of deliberation, the Legislature's Democratic and Republican leaders announced Saturday morning that they had reached a budget compromise that would increase spending on K-12 schools and fully fund the voter-approved Healthy Montana Kids Plan.

Both parties said they compromised their priorities to get a workable budget for the next two years.

“It’s not as much as I would have hoped, but apparently it’s more than what other people would have wanted,” said House Appropriations Chairman Jon Sesso, D-Butte.

His Senate counterpart, Sen. Keith Bales, R-Otter, said the compromise would keep the budget relatively stable, but less so than he would have liked.

“I don’t think anybody got exactly what they wanted, but it’s a budget we can all live with and I hope it’s a budget we can get through the biennium (with) without having to come back,” Bales said.

Throughout the session, Democrats demanded a full expansion of the voter-approved children’s health care program. But Senate Republicans reduced the eligibility threshold because they said the program was too expensive during a recession. But Democrats accused Republicans of bucking the voters' will.

Now, both Democrats and Republicans have agreed to begin implementing the full expansion by October. However, Republicans did get something out of the deal.

When voters approved the program in the November elections, a special bank account was set up to fund the expansion. Part of the initiative said that money could not be used for anything except health insurance for children of low- and moderate-income families. Republicans worked during the session to change that law, allowing some of money to be transferred to the state checkbook for general programs.

The latest budget compromise allows half of the money in the special revenue account to be switched to the general fund. On Friday, Sesso said the expansion could still happen with less money because the program won't be at full capacity for two years anyway. Leadership said the transfer will not be permanent, and the money will be returned in four years.

Sesso said the money that would have gone into the account to help pay for budget cuts in the Department of Health and Human Services and help build a $250 million cushion for the next two years in case the economy continues to tank.

The money would also ensure another Republican priority: ensuring that state will not spend more money than it earns in the next two years.

“We trust when we’re done (we would) leave our ending fund balance at the end of 2011 to be in excess of $250 (million), and to have structural balance near zero for the second year of the biennium,” Sesso said.

But Senate Minority Leader Carol Williams, D-Missoula, expressed her disappointment at the compromise on Healthy Montana Kids. Though she was “very happy” the committee decided to give health insurance coverage to 30,000 children, she said she was troubled by the change in the funding mechanism.

“It’s kind of bizarre,” Williams said. “It’s a weird way to end the weekend.”

Education funding, another contentious issue, would also received an increase from state funds. Sesso said the state would fund a 1 percent increase in K-12 base funding and a 1 percent increase in the payment per child, with 2 percent increases the next year funded by with federal stimulus money. The following year, the state would fund 3 percent increases in both categories.

Despite the announced compromise, the governor’s budget director, David Ewer, said the executive branch could not sign off on the deal because it had yet to be included in the discussion.

“The governor’s office has not digested the proposal,” Ewer said. “I hope that’s a helpful comment – it’s reality.”

Rep. Llew Jones, R-Conrad, a member of the budget conference committee that worked out the deal, commended Sesso and Bales on their ability to compromise in the final days of the session.

“You have both adequately displayed that you’re willing to make each other bleed for your philosophies,” Jones said. “I thank you for making each other bleed but nobody bled to death.”

The exact details of the compromise were still being hammered out Saturday and were not expected to be written up and vetted until Monday morning when the committee reconvenes to take final action on the changes.