Governor vetoes GOP plan to monitor stimulus

Calling it a "waste of taxpayer money," Gov. Brian Schweitzer has vetoed a Republican bill to create a commission to keep tabs on the nearly $800 million in federal stimulus dollars lawmakers have decided to spend over the next two years.

The bill, sponsored by Senate President Bob Story, R-Park City, also would have established a Web site for the public to monitor such spending. Schweitzer said his administration has already created such a site.

Other bills recently vetoed by the governor include:

Senate Bill 249: The act would require the Department of Justice to issue a limited-use driver's licence, under certain circumstances, to a person whose license has been suspended or revoked by another state.

Senate Bill 291: The act would establish a Montana Railroad Development Authority, replacing the existing Rail Service Competition Council, ostensibly to increase rail competition.

Senate Bill 349: The act would allow public officials to keep confidential certain information submitted as part of the public bidding or public contracting process for public highway and transportation projects.

House Bill 575: Among other things, the act would allow coal-bed methane producers to obtain permits to the use groundwater produced as a result of their drilling.

House Bill 629: The act would allow the deposit of any school trust land interest and income in excess of $1 million into the school flexibility account, broadening the uses for which the money could be spent.

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.

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.

Senate passes plan to spend stimulus money

Republicans hold fast as Democrats
try to get more money for CHIP, K-12

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – The Senate managed to pass a bill to spend nearly $880 million of federal stimulus money despite clashes over money for education and children’s health care coverage. The vote was 27-23.

The GOP-controlled Senate made few amendments to House Bill 645, the stimulus bill. Democrats attempted to increase levels of education spending and to fully expand the Healthy Montana Kids Plan, but each amendment died on party lines.

“I feel that this money that we’re talking about now has been misused,” said Senate Minority Leader Carol Williams, D-Missoula.

Williams said Republicans used their majority power to change the intent of the stimulus funds by diverting them away from education and health insurance for the poor.

Democrats wanted to give schools a 3 percent increases in their base and per student budgets, money that schools could count on being a permanent part of their future spending. Instead, Republicans voted for a 1 percent increases, but made up the difference with one-time federal stimulus funds that could disappear two years from now.

The fear, angry Democrats said, is that when the federal dollars are gone, schools will have to lay off employees.

“I’m certain during every one of your campaigns everyone said education comes first,” said Sen. David Wanzenried, D-Missoula. “My question is, does it really?”

But Republicans said schools face the same risks as every other state agency during a recession.

“If things get better, the governor can certainly propose to expand the budget next time,” said Sen. John Esp, R-Big Timber. “If things don’t get better, then schools will be on notice as Sen. Wanzenried said.”

The amendment failed 22-28.

Other failed amendments included a full expansion for the Healthy Montana Kids Plan and $7 million more for higher education.

Wanzenried said the bill was not ready to leave the Senate and go back to the House for approval because details were still emerging about funding errors and the availability of money.

“This is not a common sense approach to this, and to spend $1.3 billion without more deliberation is irresponsible,” Wanzenried said, taking into account the additional $575 million Montanans will receive in federal tax cuts under the bill.

But Senate President Bob Story, R-Park City, said the bill is passable, though it would have been nice to have more time to work on it.

“I know not everyone is happy with the way that it came out,” Story said.

Sen. Joe Balyeat, R-Bozeman, said he would vote against the stimulus bill, not because of the contents but he considers it bad national policy.

“There’s nothing but a hole in the ground,” Balyeat said. “We’re going to pass our children the greatest national debt ever imaginable.

Since the Senate amended the stimulus bill, it will need to go back to the House for approval.

It is highly likely the House will vote down the amendments, sending the stimulus bill into a conference committee of senators and representatives who will be asked to hash out a compromise.

Despite protests, House passes stimulus spending

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – The House today approved a plan to spend millions in federal stimulus dollars, despite numerous attempts from Bozeman-area legislators to change or reject the bill. The vote was 64-33.

The hearing for House Bill 645, which appropriates the state’s $870 million share of federal stimulus money, lasted over two and a half hours, most of which was spent on debating the merits of particular uses for the money.

House Appropriations Committee Chairman Jon Sesso, D-Butte, said the bill was imperfect but as close as Montana would get to getting immediate financial relief.

“For everyone that is disappointed, don’t think you’re alone,” Sesso said. “But I can just tell you that the piece that is before you, the elements that are included in this bill are going to do a lot of good work in this state; it’s going to help a lot of people.”

Despite Sesso’s assertions, a delegation of Bozeman-area lawmakers tried to rearrange funding to help their districts.

Rep. Brady Wiseman, D-Bozeman, tried unsuccessfully four times to get $400,000 for Bozeman to aid in rubble and debris removal from the site of the natural gas explosion downtown.

“We’ve got a big problem in the city of Bozeman,” Wiseman said. “We have a city block lying in rubble and we can’t afford to clean it up.”

Rep. JP Pomnichowski, D-Bozeman, supported Wiseman’s amendments saying the city could start as soon as possible on the clean up and could pay the money back.

But Rep. Bill McChesney, D-Miles City, opposed the amendments. He said his city had suffered similar destruction in the recent downtown fire, but the stimulus bill was already strapped.

“In the end, the help that Miles City, Whitehall and Bozeman need is going to be there,” McChesney said. “The funding and the resources need to be found outside of the stimulus bill.”

Each of Wiseman’s attempts was rejected by the House by at least 70 votes. The one amendment to pass on the stimulus bill came from Sesso. His amendment allowed cities struck by disaster, including Bozeman, Whitehall and Miles City, to use their share of stimulus money for debris removal. It passed 90-13.

No other amendments were proposed on the bill, but several Republican lawmakers from Gallatin County expressed their distain for the stimulus package in general.

“I have a sense that we are presiding over the demise of the American republic,” said Rep. Joel Boniek, R-Livingston. “My problem with receiving fed dollars is that these dollars are fraudulent.”

Boniek also told lawmakers they were “posturing” by pretending to know how the bill would affect Montana, something he called a “poorly disguised attempt to give legitimacy” to stimulus money.

Tensions broke after Rep. Michael More, R-Gallatin Gateway, accused lawmakers of succumbing to the “call of money.”

“What god do you serve?” More asked the House. “Is this all pretense, the Pledge of Allegiance?”

More continued his speech against HB645, calling it “manna from Heaven” for the lawmakers. When asked by Rep. Dennis Himmelberger, R-Billings, if his comments were pertinent to the bill, More said they were, “If you can grasp that, Mr. Chairman.”

More was gaveled down for being out of order. He later apologized, saying he did not intend to offend anyone.

On Tuesday, the House Appropriations Committee reallocated $75 million of Gov. Brian Schweitzer’s original proposal, leaving much of HB645 intact. The bill works in coordination with the state budget bill, which is currently being considered in the Senate.

Committee backs changes in stimulus spending

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – A key House panel voted 18-2 Tuesday to spend some of the state’s $870 million in federal stimulus money on cities, counties and public education instead of investing in the teacher’s retirement fund and new license plates.

The House Appropriations Committee decided to reallocate $75 million of Gov. Brian Schweitzer’s original proposal but left the rest of House Bill 645 intact.

Committee Chairman Jon Sesso, D-Butte, said the amendments to House Bill 645 were based on a level of unparalleled bipartisanship and cooperation with the state administration.

“This was truly a team effort,” Sesso said.

Sesso said the committee endorsed a “lion’s share” of Schweitzer’s proposal, and the amendments should be taken in proper perspective.

“We rearranged the deck chairs on $75 million out of $800 million,” Sesso said.

Lawmakers had no say over nearly $600 million of the stimulus money because it was allotted for specific programs by the federal government.

The $75 million reallocation included removing $43 million from the Teacher’s Retirement System, $3.5 million from the Southwest Montana Veteran’s Home, $3 million for new license plates, $2 million from the Ruby Dam restoration and $4 million for updating the secretary of state’s computer system.

The money was given to programs on a committee priority list, Sesso said.

One of the top priorities was a $20 million boost for city and county public works projects and $3 million for tribal governments. Legislators also set aside $3 million for historical restoration projects, including Traveler’s Rest near Missoula and the Daly Mansion in Hamilton.

In education, lawmakers decided to move $15 million to K-12 education and $13 million for tuition mitigation in the University System and community colleges. Community colleges will also get over $1 million for infrastructure projects.

Human services received $2 million for food banks, rescue and homeless shelters, as well as $3 million for aging services.

Rep. Walt McNutt, R-Sidney, said the committee kept the next legislative session in mind and tried to avoid creating fiscal sinkholes in the budget. He also said the committee was not contentious in the process.

“I didn’t get elected to come argue,” McNutt said.

But Rep. Dave Kasten, R-Brockway, said he voted against the stimulus bill because it creates a more bloated government.

“We are just spending way, way, way too much money,” Kasten said. “I’ve got six grandkids and we’re spending their money right here.”

Much of Schweitzer’s original proposal for the stimulus money remained intact, including the $60 million to cushion increases in the Medicaid caseload and $43 million for school facilities and infrastructure. Sesso said $35 million of that money is expected to be “on the street” upon passage of the bill.

Lawmakers expect a full House for HB 645 vote on Thursday. The bill works in coordination with the state budget bill, which is currently being considered in the Senate.

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.