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.

Debate gets testy over trimming education budget

HELENA – A fight over $1 million divided the House Appropriations Committee today as it attempted to trim the state education budget.

Committee Chairman Jon Sesso, D-Butte, told committee members that they all had different priorities for education money, but the overarching goal needs to be a balanced budget.

“It’s really not appropriate to say that we should trim it in ways 10 of us wish and 10 of us don’t,” Sesso said. “We have to trim the budget as a group of 20 people.”

The million-dollar contention began with a $1.5 million allotment for the University System agencies. The money was not in the governor’s budget, but was added in during subcommittee hearings by a Republican majority, 4-3.

Democrats proposed an amendment that would take $1 million of the $1.5 million and split it between Montana PBS and non-beneficiary students at tribal colleges.

Republican lawmakers fought against the amendment, saying the agricultural extension agencies need all of the money to survive.

“It will help the economy of the industries important to Montana,” said Rep. William Glaser, R-Huntley. “I’m not willing to give up the slight gain we’ve gotten here.”

Supporters said it would fill the gap for tribal colleges and help fund PBS. Both were given one-time-only funding last session.

“It’s not an injection in the arm,” said Rep. Cheryl Steenson, D-Kalispell. “It is required for the tribal schools.”

The amendment died on a 10-10 party-line vote.

The battle for the same million dollars continued in the next proposed amendment, which said if the money could not be reallocated to those programs, it should be removed entirely.

The amendment's sponsor, Rep. Dan Villa, D-Anaconda, reminded committee members that an earlier motion to give the Office of Public Instruction more money to investigate teacher-related sex crimes was voted down due to money concerns.

“I can’t in good conscience leave a million dollars in new money on the table when we’re unwilling to fund getting bad teachers out of the classroom,” Villa said.

Rep. Duane Ankney, R-Coltrip, said Villa’s comments were inappropriate.

“We have school boards and superintendents and principals and teachers that do a real good job keeping bad teachers out of the classroom,” Ankney said.

- by CNS correspondent Molly Priddy