Making Sense of the Legislature’s Shortfalls

At the beginning of Montana’s 2017 Legislature, Governor Bullock laid out the case for a sound state budget. He explained clearly that due to declining energy and commodity prices state revenues would be lower than expected. This is not due to Montana’s economy, humming along at 3.9% unemployment, but rather national trends as we can see from our neighbors in North Dakota and Wyoming having the same revenue decreases from the energy industry.

Even though the rainy day fund worked how it was supposed to, in spite of Republican attempts to deplete the fund year after year, cuts were going to be made to the budget and modest revenue increases were needed. Bullock’s proposed state budget kept Montana in the black and rebuilt the rainy-day fund back to $300 million. This was done through a series of responsible targeted cuts to agencies, an increase in the cigarette tax, a modest 1% increase on income taxes for folks making over $500,000 a year, and increasing the Capital Gains tax. Basically, repealing the Martz Administration tax cuts.

However, the GOP-led Legislature chose to bury their heads in the sand and avoid revenue generating realities. They chose to make up a dubious revenue estimate that projected $100 million more in state revenue that did not add up to Montana’s budget experts. Republicans chose to reject the proposal to raise the cigarette tax just $1.50, the first increase in 12 years. This was influenced by heavy lobbying from Big Tobacco and against the overwhelming support of Montanans in favor of the cigarette pack tax. Republicans also stood by their wealthy donors and corporate interests to defeat a proposal for a mere 1% tax increase on millionaires and for ending unfair tax breaks to corporations.

The Republicans refused to look at where the budget could be cut meaningfully to not disrupt state services. They chose instead to pass a state budget with a blanket reduction bill known as Senate Bill 261. This bill triggered cuts across the board to state services including a reduction to Medicaid Provider payments. Republicans believed that a 1% mandatory reduction in provider payments could be weathered but they did not account for the reduction in federal matching funds that comes with it, leaving DPHHS to cut Medicaid Provider reimbursements by a total of 3.47%. This was their solution at the end of Session or it was going to be a government shutdown, the GOP’s other favorite tactic.

Much of this back and forth between Democrats and Republicans were highlighted in Lee Newspaper’s piece about text messages from the Governor’s Office to Legislators. Democrats and the Governor were constantly trying to get the Republicans to the table and meet about making the hard decisions on the budget. However, Speaker Knudsen was hardly available to meet, preferring to spend the second to last day of the session out of cell service.

Now the state is now faced with cutting 10% across all agencies because the executive branch cannot increase revenue without legislative approval, they can only make cuts. Painful, unnecessary cuts that could have been avoided if Republicans had come to the table in good faith.

Luckily Governor Schweitzer and Governor Bullock have kept a steady hand on Montana’s fiscal ship. Bullock will do what is necessary to keep essential services operating. But the fact is that this negative revenue trend has been here for a while. Even while Montana is experiencing some of the highest wage growth in the nation and record low unemployment levels, revenue has been falling short ever since the Martz era and was only sustainable lately because of the Bakken Boom. Good thing that rainy-day fund was left intact.

We must demand the Legislature reform Montana’s tax code. We cannot keep relying on boom and bust industries and we can’t keep giving handouts to millionaires and corporations. Montanans must demand millionaires pay their fair share to fund essential state services. Montana must finally end the failed trickle-down economics of the Martz Administration.


32 Comments on "Making Sense of the Legislature’s Shortfalls"

  1. Old Line Democrat | September 1, 2017 8:12 PM at 8:12 PM |

    Typical of the MR republicans,they forced a state equivalent of the federal sequestration on us. Absolutely ignoring the problems we are experiencing on the federal level because Obama called their bluff. We are going to be terrorized by this stupidity until we can get these nuts voted out. This is partially the result of term limits, another nomenclature gave us so now we only have as grinders and fox true believers in the republicans side.
    My big sorry is that they will set after the money in PERS to balance the budget and we will quickly slide into the same bankruptcy as Kansas and the other red dominated datasets. Disaster is truly on the horizon.

  2. Thank you for composing this factual synopsis of recent political history, for everyone’s convenient reference next year.

  3. This article should be updated in September of 2018. This would be so that people will have a ready reference as to the damage done by adherence to a fantasy. Then at every debate, and each race should have multiple debates, the questions need to be asked, do you believe in letting qualified economists providing the estimates based on actual data, or should politicians substitute their beliefs for real analysis.

  4. Montana is not alone in this. Alaska also has a legislature with Republican basket cases in charge. We have not had a state income tax for almost 40 years, have almost depleted our rainy day fund, and our state financial rating is in free fall. Our governor is about to call these jerks into the 4th special session this year, and they still refuse to acknowledge the need for increasing state revenue by taxing income.

  5. Let’s get together and vote these slackers out!

  6. boB AKA @Gyrogyrloose | September 2, 2017 6:36 PM at 6:36 PM |

    this will be the third time we have allowed the Robber Barons to run things and it’s as big a failure as the first two-I just wonder how bad it will have to get before we finally “rise up” and push that big pendulum back the other way? If we have to depend on folks “wising up” to push-we are screwed.

  7. The article failed to go back to the true problem – which was Gov BS bloating the State Govt up to unaffordable levels.

    All Bullock could think about was raising taxes, while the legislature manned-up and made the necessary choices.

    • ” which was Gov BS bloating the State Govt up to unaffordable levels.”

      In what way?

      Please provide examples.

      • Eric, will be holding his breath until the Sinclair Stations provide the answers.

      • It’s all public record – he added 1000 state employees, and increased State spending about 25% compared to the lean and mean government of Governor Racicot and Martz.

        Government BS was much smarter than Bullock, and he would have gotten a better (for the Dems) budget passed. Where Bullock stupidly followed the liberal line and vetoed popular bills, Government BS would had traded his signature for something he wanted.

        Either you guys are political newcomers here, or you are trying to master deception, but some of us were actually here, and remember.

        I’m betting you have forgotten Government BS trading unadvertised States jobs for political gain even, haven’t you?

  8. Obstruction of Justice is not a pretty thing Eric.

    Face it Bullock is Governor. The MT GOP party does not give a shit about Montanans.

  9. Nothing to face “The Bobs” – at least he isn’t doing any real damage to the State, and we’ll be rid of him soon enough.

    The GOP in Montana is the party who’s trying to keep your taxes low, protecting your rights, and building an economy that will support new jobs.

    If the Dem agenda, of gun control, special rights for gays, shutting down timber, mining, and drilling, is for you, go ahead and keep supporting them. As you watch your health insurance costs skyrocket, send a check to Jon Tester, the man who made it happen.

    If you take a real look at what the parties are doing for the everyday Montanans, I’ll soon be seeing you at GOP get-togethers, helping to make Montana great again!

    • This is the Montana GOP that is trying to help me?

      Kind of like they are tossing an anchor to a drowning man.

      Eric, you head is really up your ass on this one. No surprise, you have a very brown neck.

  10. Judy Martz was such a terrible Governor that her own party would not let her run for a 2nd term.

    She aided and abetted a cover up “Gov. Judy Martz said Friday that she washed the clothes her top aide was wearing hours after he was involved in a drunken-driving crash that killed the Montana House majority leader.”

    She supported and worked for the destruction of Montana Power as LG of Roscoe deregulating the company. She destroyed many Montanan’s Jobs and Retirements.

    Her tax cuts for billionaires and out of state corporations are the last piece of her failed tenure that needs to be repealed as we wash the dirty laundry of her DUI crash of an Adminstration in Montana

    • A terrible Governor who had bad fire seasons, yet still had a budget surplus when she left office, and got it done with 1000 less State Employees, and a much leaner budget.

      We need more terrible Governors like that.

      • I am sincerely impressed. I have never heard anyone defend Judy Martz. You take being a yes man troll to all new levels. It is agreed by every Montanan that the 4 years she spent in office were the worst 4 years this state has ever seen. So, basically go back to whatever state you lived in until you moved to Bozeman in 2009, when you bought some foreclosed houses and became a slum lord.

  11. Something is wrong when a Montanan making 230K a year pays the same rate as I do on 23k a year.

  12. Eric- It is clear that you really have no clue what you’re talking about. It appears that your sources are right wing propaganda sites that distort the truth because they know that if they are honest, people will reject them. I suggest that you start by doing some research on the Affordable Care Act. AFA is not insurance. It is a bill to extend health care to all citizens. It set up state run market places where people can choose their coverage; it disallows companies refusing care based on “pre-existing” conditions or life threatening conditions- among other things. It is the insurance companies that have raised the rates of people- the ACA has no effect on that. As for “special” rights for gays, those aren’t special rights that gays are looking for; they merely want the SAME rights as heterosexuals. I don’t know if you are as ignorant as your posts might suggest or if you are simply passing along the canards that your party passes along. Either way, you would be far better served by becoming an educated voter.

  13. “Well “The Bobs” why don’t you point out what lies or mistakes I’ve Posted?”

    Pretty much everything you post here is a lie, a distortion or your opinion.

    • Thank you “The Bobs” for proving my point. No wonder you don’t use your name. I have some old advice for you: It is better to be considered a fool, than to speak (type) and remove all doubt.

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