Legislature adjourns after passing key money bills

Senate President Bob Story brings the gavel down to adjourn the 2009 Legislature. (Photo by Molly Priddy)

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – With snow falling outside, the final gavel fell on Montana’s 61st Legislature Tuesday, as lawmakers gave final approval to the state budget, the federal stimulus plan and a bill that seeks to lessen the financial blow to taxpayers from the state’s recent property appraisal.

Republicans and Democrats fought this session over funding for children’s health care and K-12 schools, but legislative leadership said the level of civility this session allowed for more compromise than the last session.

“We did have a good working relationship between the Senate and the House and between the Republican and Democrat caucuses,” said Senate President Bob Story, R-Park City.

Both parties said they stuck to their priorities throughout the session, with Republicans pushing for less state spending and Democrats promoting more state funding of children’s health insurance and education.

“I think overall we have done the people’s business,” said Sen. Carol Williams, D-Missoula.

House Bill 2, the state budget, will fully fund the Healthy Montana Kids Plan, a voter-approved expansion of children’s health insurance funded by the state. The budget will also give K-12 education a 3 percent increase in funding with help next year from federal dollars.

Democrats demanded the full expansion for children’s health care and more school funding for most of the session, but Republicans argued the state did not have enough money to pay for a new program and still maintain state agencies.

In another effort to reduce state spending, Senate Republicans cut 2 percent from all state agency budgets, a move that left a bad taste in some Democratic mouths.

“This specifically targets jobs in state agencies,” said Sen. Christine Kaufmann, D-Helena.

The Senate voted 27-23 to approve the latest version of the budget, but several senators expressed reservations about overspending.

“I’m flabbergasted that this is what we call an austere budget,” said Sen. Joe Balyeat, R-Bozeman, after describing over $10 billion of spending, including federal stimulus dollars.

Sen. Jim Shockley, R-Victor, said revenues will probably not bounce back as quickly as the budget suggests, and Montana will be in a hole. “This (budget) is a compromise, but it won’t work,” he said.

The Senate’s budget chairman, Sen. Keith Bales, R-Otter, stood behind the budget he and his committee crafted, but also expressed doubts about avoiding a special session.

“I don’t know that we could’ve crafted a budget in these uncertain times (in which) everybody could’ve gotten what they wanted,” Bales said.

Some Senate Democrats voted against the budget because it temporarily reroutes funding earmarked by voters for the Healthy Montana Kids Plan into the general fund. They also disagreed with removing an amendment that would allow the Children’s Health Insurance Program to pay for contraceptives.

“In 2009, to be standing here trying to beg and plead about having contraception being taken care of so children will have a healthy opportunities ahead of them instead of unplanned pregnancy is just beyond my recognition of where we are as a people,” said Senate Minority Leader Carol Williams, D-Missoula.

Sen. John Brueggeman also favored CHIP-funded contraceptives as a means of avoiding future abortions.

“I wish that everyone was living biblically moral lives,” Brueggeman said. “I wish that was the case but it is not.” He told Republicans that more abortions would happen because women could not access birth control.

“We all have to be clear with that,” Brueggeman said. “We all have to sleep with that.”

The House voted 56-44 to pass the budget with little discussion. House Appropriations Chairman Jon Sesso, D-Butte, said he worked with Republicans to craft an austere and prudent budget that also pays for children’s health care and education.

“I’m proud of the package that we present to you today,” Sesso said. “It’s a budget (that) we can say without a doubt is fiscally responsible.”

But the House would not stay quiet for long. The bill that seeks to lessen the sting of higher property taxes after reappraisal, House Bill 658, was hotly debated as several Democrats split with their leadership to denounce the bill.

Rep. Mike Jopek, D-Whitefish, said the bill does not provide enough money to ease tax increases, saying some homeowners could be faced with 15 percent tax increases with little help for elderly or low-income residents. Rep. Dick Barrett, D-Missoula, agreeing with Jopek, said the bill forces the poor to pay more of their wages toward property taxes than the wealthy.

But House Speaker Bob Bergren, D-Havre, said the bill needed to pass before the end of the day or a special session would have to be called.

“Right now, this is the best we can hammer out,” Bergren said. He said that if there were problems, the next session could adjust tax rates.

The bill passed with a 57-43 vote.

The 2007 session was plagued with bipartisan acrimony over spending a $1 billion surplus, which led to the Legislature’s failure to complete its one constitutional duty in a regular session: constructing a state budget.

Current lawmakers said they entered the 2009 session with that lesson learned. They said they were proud of the civility and openness between both houses and parties.

Before any of the work can officially be deemed complete, the bills have to be signed into law by Gov. Brian Schweitzer. The governor said he has yet to look over the details in the budget and stimulus bills but hopes to avoid a special session to deal with any discrepancies.

“I’m pleased with the work of the Legislature,” he said. “This wasn’t an easy session for anyone. Let us hope that there isn’t something that we left behind.”

But Schweitzer also said he was not pleased with the work done on property-tax reappraisal mitigation because it gave too many breaks to subdivision owners and businesses.

The governor also said universities should be able to mitigate tuition increases despite cuts made to their budgets in HB 2.

“I would encourage the Board of Regents to cap tuition for another two years,” Schweitzer said.

Since fewer than 100 legislators voted in favor of the budget, Schweitzer retains the power to veto individual aspects of the bill. The governor would not say if this was a choreographed effort by Democrats, but did say there is always communication between his staff and Democratic legislators.

Bergren said there was talk about ensuring Schweitzer’s line-item veto power, but nothing official.

“There were some discussions in the hall, but there was no coordinated effort,” Bergren said.

Barring special session, the next Legislature will meet in 2011.

Governor blasts GOP budget and stimulus plans

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – As bills to spend billions of state and federal tax dollars work their way through Legislature’s final days, Gov. Brian Schweitzer is making it clear that he’s not pleased with what he sees heading his way.

“This session, if it ended today, would be less successful than the last legislative session,” Schweitzer said in an interview this week. “The major funding bills are not anywhere close to a condition where we could support them.”

The governor is especially miffed with Senate Republicans who reduced funding for a voter-approved program to expand health coverage for another 30,000 uninsured Montana children. Their plan would add cover about 15,000 additional children. Nor is he happy with the GOP plan to spend less ongoing state money on K-12 schools.

But if you really want to set him off, ask him what he thinks of GOP’s plan to dole out nearly $800 million in federal stimulus dollars provided in the Obama administration’s Recovery Act.

“The money that is contained in (that bill), violates the principal of the Recovery Act, and we would run a very high risk of being forced to send the money back to Washington, D.C.,” Schweitzer said. “There is an inadequate investment in education and health care.”

Senate Republicans fired back, saying the criticism comes from an absent governor who did not offer suggestions about how to solve problems earlier in the session. They also said their amendments to the bill fund both health care and education responsibly, given the recession.

“Education is funded at the level he funded it at in his budget,” said Senate President Bob Story, R-Park City.

That’s technically true, but the clash over of how Democrats and Republicans want to fund schools has implications for the future.

Schweitzer’s proposed budget would give school districts a 3 percent increase in ongoing state money for their base budgets and 3 percent increase for per student payments. That money would be a permanent increase, unless some future Legislature votes to cut it.

But Senate Republicans fear that if the economy doesn’t improve and state tax coffers shrink over the next two years, lawmakers could be forced to either slash school funding or raise taxes, something neither party wants to do.

The GOP solution is to give school districts the same amount as the governor proposed but with one important difference: The bulk of it would come from one-time federal stimulus money – money that won’t be there in two years.

That means that if the economy doesn’t improve, schools had better start looking for ways to cut their budgets. Senate Majority Leader Jim Peterson, R-Buffalo, said the GOP plan gives schools time to consider changes, if necessary.

“We’re not underfunding education,” Peterson said. “The only debated issue is where should the base (increases) be two years from now.”

Another simmering feud between Schweitzer and GOP leaders is over the doling out federal stimulus dollars to cities and counties for “shovel-ready” infrastructure projects, such as road and bridge work.

The governor wants legislation that spells out each single project. Senate Republican want to give local governments block grants so they can decide how to best spend the money.

Story said the change was made to protect the money so Schweitzer could not pick and choose which project to veto when it’s time to sign the stimulus bill.

That’s “ridiculous,” Schweitzer said during Wednesday’s interview. To make his point, he produced a 60-plus page copy of the main budget bill, tossed it on the table and began pointing out various line items and their costs. That system allows for transparency, Schweitzer said.

“This is the way we appropriate money in Montana,” Schweitzer said. “The Recovery Act is not going to allow states to just shovel money out of a window in the dark of night and I, as the governor who signed the letter accepting responsible for these recovery dollars, will not sign such a bill.”

As one of the few states in the country not facing billions in deficits, Schweitzer said mistreatment of federal dollars could put Montana’s relatively sound economy at risk.

“I’m not going to allow a few members of the Legislature to put Montana in a difficult situation,” he said.

But Peterson and Story said the governor is wrong in his concern about transparency. Any city or county applying for the money would have to go through the Department of Commerce, Peterson said, a function of the governor’s office.

“This is a better way,” Peterson said. “You can see that it’s even more transparent.”

Budget matters aren’t the governor’s only concerns as the Legislature heads down the homestretch. He’s also frustrated with Republicans who blocked his bill to set govern “carbon sequestration,” a fledgling technology to capture and store underground the carbon dioxide emitted by coal-fired power plants.

Republican Sen. Keith Bales, R-Otter, drew Schweitzer’s anger after Bales sponsored the GOP version of a carbon sequestration bill. Both bills were tabled amid partisan differences centering on who would authorize permits and the state’s ultimate liability for any environmental damage the process might cause.

“He couldn’t answer questions about his own bill,” Schweitzer said of Bales.

The governor accused Republicans of purposefully bringing forward a bad sequestration bill, knowing full well it would die but earning credit for proposing it.

“These are the same cats that voted against the ‘clean and green’ tax policy that we had in the last legislative session that’s already brought about $1 billion worth of investment to Montana,” Schweitzer said.

Peterson disagreed with Schweitzer’s assessment of the sequestration bill.

“There’s nothing wrong with that bill,” Peterson said. “Sen. Bales worked hard on that bill.”

Peterson said the governor’s criticism stems from partisan differences, not content.

“In my mind, it’s all politics,” Peterson said. “The governor needs to govern with a window, not just with a mirror.”

Schweitzer did have some plaudits for Republicans who insisted, as he does, that the budget include a $250 million contingency or “rain day” fund, in case state revenues continue to tumble. Members of the governor’s own party want to spend some of that money now for a variety of projects and causes.

“I’m glad I’ve got ‘em broke in,” Schweitzer said of the Republicans. “I had to veto 19 bills to get my ending fund balance at the end of the last legislative session.”

Peterson and Story said a keeping a reserve at the end of the session makes sense because the economy is still struggling.

“That’s just good business,” Peterson said. “That’s calling a spade a spade.”

Budget and stimulus bills are bound for House-Senate conference committees, whose members are charged with seeking compromises. Story and Peterson predicted reasonable outcomes.

“I think in the end the governor hopefully will be pleased with it,” Peterson said.

Governor urges fast action on stimulus spending

HELENA – Gov. Brian Schweitzer outlined his plan for the state’s share of the stimulus money today, saying lawmakers need to move quickly and appropriate the money to jump start the timber industry, freeze tuition and rebuild highways.

“The Montana Reinvestment Act will put Montana back to work,” Schweitzer said at a press conference.

Schweitzer asked lawmakers to have the stimulus bill ready to go by April 3, a deadline, he said, was put on the money by the federal government.

“They have said use it or lose it,” Schweitzer said.

House Appropriations Committee Chairman Jon Sesso, D-Butte, said it would be tight but the Legislature will be able to get the bill out in time.

“We’ll adjust as necessary,” Sesso said. “If the federal government can get it done in 45 days, we’ll get it done in 22.”

If legislators follow through with Schweitzer’s demand, they would only have 22 legislative days to complete the task.

Schweitzer’s plan for the stimulus money includes $42 million for a two-year tuition freeze at Montana colleges, $43 million to stabilize teacher retirement funds and $10 million for the struggling timber industry.

“Unemployment rates in Montana are relatively low until you get to northwest Montana, where the timber industry is hurting,” Schweitzer said.

The money would be used to buy new equipment for sawmills to help them deal with the thousands of acres of trees that have been killed by beetles, Schweitzer said.

Sesso said the schedule for the stimulus bill has been moved up, and plans on introducing the bill on Saturday. It will still work in tandem with the state budget, Sesso said.

-by CNS correspondent Molly Priddy

Schweitzer sees hope amid economic hardships

HELENA – Gov. Brian Schweitzer’s optimistic State of the State address was met with applause from Democrats and hesitation from Republicans on Wednesday night as he outlined his hopes for education, energy development and the federal stimulus package.

“We can accomplish more working together to build than we can tearing each other down,” Schweitzer told Senate and House lawmakers.

Before going into his plans for the current legislative session, Schweitzer detailed his list of Montana’s accomplishments in the last four years, including the implementation of full-time kindergarten, heightened oil production and the creation of more jobs.

Each point was applauded by Democratic lawmakers, but Republican leaders were not as impressed.

House Minority Leader Scott Sales, R-Bozeman, said Schweitzer’s portrayal of increased oil production in the state was inaccurate. “He plays really fast and loose with the figures,” Sales said. “I’m not sure where he gets his numbers.”

In his speech, Schweitzer assured Montanans that "help is on the way" with the federal stimulus money that will provide jobs, access to health care and money for education. The governor also promised his administration's "rapid response team" would help Montanans who have lost jobs and families in need of health care and unemployment benefits.

Senate President Robert Story, R-Park City, who delivered the Republican response, promised that the Legislature will create an oversight commission to monitor how those federal dollars are spent.

Schweitzer drew bipartisan applause when promised the state would collect “not one new dollar" in property taxes due to the recent statewide reappraisal of property, which reported an average increase in residential values of more than 40 percent.

In touting Montana's gains on the energy front, Schweitzer urged Senate Republicans to advance stalled legislation that would set standards for coal-sequestration, a process by which the greenhouse gas carbon dioxide is removed from coal and stored underground. He said Montana could be a leader in the industry.

He also urged legislators to pass House Bill 388, which would tax oil and gas production to provide raises for teachers. He said the idea comes from Wyoming but added that Montana will still tax oil and gas at a lower rate than that state.

But Sen. Roy Brown, R-Billings, said the bill would in fact be a new tax on oil and gas production, creating a disincentive for business development in the state. “He doesn’t always let the facts get in the way of a good story,” Brown said.

Sales agreed, saying the governor could not promise no new taxes and support HB 388 at the same time. “If you’re going to take a dollar from one person and give it to another, that’s considered tax,” Sales said.

Senate Minority Leader Carol Williams, D-Missoula, said she thought the governor “hit all the right notes” when he discussed education, economic development, health care and energy.

Williams also said she appreciated Schweitzer’s acknowledgment that the Legislature had an equal voice in the lawmaking process. “It was helpful, given the potential of having really divisive things that could’ve been said,” she said.

In his televised response to the governor's address, Story promised to keep a close eye on spending and to keep the budget process open and transparent to the public. He offered few specifics, however, on Republican plans to deal with what both he and Schweitzer acknowledge were tough economic times.

-by CNS correspondent Molly Priddy