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.

Lawmakers inch closer to session-ending deal

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – Shadowy negotiations between Democrats and Republicans on children’s health insurance and school funding came to light on Friday, hinting at a possible break in the state budget stalemate as the 61st Montana Legislature winds down.

Both parties said it was time to compromise, saying they completed more work in three or four hours than they had since Monday. Leaders said they were optimistic about the negotiations, despite a petition for special session requested by Senate President Bob Story, R-Park City.

“At least everybody is talking,” said Senate Majority Leader Jim Peterson, R-Buffalo. “That’s a good sign.”

At a meeting before noon Friday, both Republican and Democratic budget chairmen explained the deals they had been attempting to make with the other side over the highly contentious Healthy Montana Kids Plan and K-12 education.

Senate Finance and Claims Chairman Keith Bales, R-Otter, said the Senate had proposed raising state funding for education and allowing a gradual implementation of the voter-approved expansion of programs that offer health insurance for children from low- and moderate-income families.

Earlier this session, the House agreed to 3 percent increases in state funding for K-12 schools. Senate Republicans cut the state funding to 1 percent, backfilling the difference with one-time-only federal stimulus dollars.

Bales said the Senate GOP sent a proposal to House leaders Thursday night that would fund K-12 education at a 2 percent increase, using stimulus money to make up the final 1 percent. The proposal also contained a gradual implementation of the Healthy Montana Kids Plan, which would cover an estimated 30,000 uninsured children by July 1, 2010.

Bales said as state revenue estimates keep falling, expensive programs should be taken in stride. “If we’re going to err we need to err on the side of fiscal caution,” he said.

But House Democrats countered with a proposal of their own Friday morning, asking for a 2 percent raise for schools but demanding an immediate, full expansion of health coverage for uninsured children.

House Appropriations Chairman Jon Sesso, D-Butte, said a 2 percent increase for K-12 schools is a fiscal reality during a recession, backing off of previous statements that a 3 percent increase should be the minimum.

“(Schools have to be willing to also cut a little bit and prepare to cut in the future,” Sesso said.

Sesso also said the Healthy Montana Kids expansion would not require all the funds currently reserved in its bank account because it would just be starting up. So, Sesso said, there could be $10 million per year transferred to the state checkbook to balance out the 2 percent across the board cut Senate Republicans gave to all state agencies earlier in the session and bolster health programs for the poor.

But Bales said going full bore with the health insurance expansion could lead to fiscal potholes down the road.

“I don’t think anybody knows how fast it will ramp up or what the cost actually may be,” Bales said.

Republicans eventually responded with another proposal, which Democratic leaders said was headed in a positive direction but did not elaborate on details.

The House and Senate budgeting committees agreed to work through the weekend to hammer out the details on education and children’s health care in hopes of passing a budget before the final legislative day on Tuesday.

Legislature remains deadlocked over budget bills

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – Simmering frustration and parliamentary jousting marked yet another day in which Montana lawmakers failed to find a compromise over a budget to guide the state through the next two years.

As the 90-day session draws to a close, the House today voted to dissolve a special committee attempting to patch together a bill that specifies funding for children’s health insurance and education, key points of contention between Democrats and Republicans.

House Bill 676 is the partner bill to the state budget bill, House Bill 2. It provides implementation language needed for appropriating state funds. This bill also contains the amendments from the GOP-controlled Senate cutting House proposals to fully fund the voter-approved Healthy Montana Kids Plan and to finance K-12 schools.

“All the bad things that the Senate did to us are in there,” said House Speaker Bob Bergren, D-Havre.

Bergren said his decision to dissolve the conference committee on HB 676 does not kill the bill itself, because another committee could be appointed. But it was meant as a warning to Senate Republicans, he said.

“Let’s negotiate and go home,” Bergren said. “They’ve wasted four days on me.”

But Senate Republicans said the House’s actions did nothing to quicken the pace of budget negotiations, which have been at a stalemate for days.

“I think that does pose some very serious problems with being able to go on ahead and complete the process,” said Sen. Keith Bales, R-Otter and chairman of the Senate's budget committee.

“I think that progress was being made, but I think that the sheer fact that the House has, in essence, taken away one of the tools that we need to solve this problem is unfortunate at this time.”

Funding for children’s health care and K-12 schools have been the major points of contention this session. Republicans say the state does not have enough money to fully implement a voter-approved expansion of a program providing health coverage to some 30,000 uninsured Montana children. Nor does it have enough state money to fund schools at the level Gov. Brian Schweitzer and Democrats want, they say.

Democrats disagree, saying Republicans are ignoring the will of the voters on children's health care and will also lead K-12 schools over a fiscal cliff if it lowers state funding.

At a Thursday morning budget meeting, House Appropriations Chairman Jon Sesso, D-Butte, did not elaborate on the House’s actions, but instead pushed for full funding in both schools and children’s health insurance. He said there is money available, even if it means not meeting the governor’s goal of keeping $250 million in reserve at the end of session.

“There’s no fix in it unless we come to agreement on these two major issues,” Sesso said.

However, Senate Majority Leader Jim Peterson, R-Buffalo, said he was “disappointed” in the House’s decision on HB 676, and added that it would not help lawmakers finish their task of creating a state budget by the 90th legislative day.

There will be significant funding changes if HB 676 does not pass. A 2 percent cut across all state agencies put in place by Senate Republicans earlier in the session would be removed. So would the decreases to the base funding for K-12 school districts.

When the GOP lawmakers decided to lower state K-12 funding and backfill the difference with federal stimulus money, they put language into HB 676 to make this move permanent. This would mean the reduction in state funding would be permanent when federal dollars disappear in two years. Without HB 676, the reduction would only apply to this biennium.

HB 676 also allows the state to use money from a special revenue fund to pay for the Healthy Montana Kids Plan. Bergren said this language could be put in the stimulus bill.

The bill also allows Montanans covered by Children’s Health Insurance Plan to use CHIP money for contraception.

As of Thursday afternoon, conference committees took no further action on the nearly $8 billion budget bill or companion legislation to spend nearly $800 million in federal stimulus dollars.

The 2007 Legislature was the first in Montana’s history to finish a 90-day session without fulfilling its principal constitutional duty to create a state budget.

GOP rejects pleas to restore money for CHIP, K-12

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – State senators debated a proposed state budget of nearly $8 billion Thursday, with Democrats trying and failing to insert more money for schools and for children’s health insurance.

Democrats brought amendments to change state funding in the two largest sections of House Bill 2 – health and human services and education.

Senate Minority Leader Carol Williams, D-Missoula, brought the first attempt to fully fund the Healthy Montana Kids Plan. The voter-approved children’s health insurance program expansion was reduced by Republicans who insisted on reaching “structural balance,” meaning the state should not spend more money than it earns in revenue during the next two years.

“I would like to just submit that the kids of Montana are getting sacrificed on the altar of structural balance,” Williams said. “We’re about to say on partisan vote, we don’t care what the voters said.”

Williams also said fully funding the program would provide coverage for 30,000 uninsured children. The GOP plan would cut that number in half.

But Republicans defended their position, saying they are expanding health care coverage for uninsured children from low- and moderate-income families, though not to the threshold the voters approved.

“We are not turning our back on the needy in our state,” said Sen. Dave Lewis, R-Helena. “We’re adding 15,000 children.”

The amendment failed mostly on party lines, 24-26. Sen. John Brueggeman, R-Polson, was the only Republican to vote for the full expansion.

In education, Sen. Bob Hawks, D-Bozeman, proposed raising K-12 funding to offer a 3 percent increase in schools' base budgets and 3 percent increase in per-student support. The Senate's budget committee voted earlier to limit state funding to 1 percent and 1 percent, and to use federal stimulus funds to make up the difference.

Democrats argued that the reduction would be permanent in the next biennium because stimulus dollars are one-time-only funds. Republicans said the school system needs to tighten its belt along with all other state agencies. The amendment failed, 23-27.

Democrats also failed to pass an amendment to exempt the Montana School for the Deaf and Blind from the previously agreed upon 2 percent cut across all state agencies. Sen. Mitch Tropila, D-Great Falls, asked lawmakers to consider the unique challenges these children face.

“I implore you today, please vote with your heart,” Tropila said. “Think of these kids.”

But Republicans said it would be unfair to allow one program to escape the cut.

“I realized that this is a very good school and everything. However, I think that there’s lots of other places that have good arguments too,” said Sen. Keith Bales, R-Otter. “I don’t think we can make any exceptions.”

The amendment died on party lines, 23-27. Tropila later tried similar amendments, but all failed.

Since the budget was amended and passed by the Senate, the House must agree on the amendments before it can go to the governor. However, the budget will most likely be sent to a conference committee consisting of representatives and senators charged with hashing out differences.