Heads up! 

The state budget scythe is sharp and swinging

It is well known that nothing in politics is more boring than budget issues. Nothing. But the looming state budget crisis, boring as it may be, is going to be the central focus of state politicos for some time to come. The reason is simple: Laws without money to back them up are nothing but words on paper. From education to the environment, social services to state parks, the budget—and proposed cuts to same—touches us all. Which is exactly why it’s not a minute too soon to start talking with your local legislative candidates about the budget issues and what they plan to do about them.

Last week, most state agencies submitted proposed 10 percent budget reductions as required by law when the state revenues fail to keep up with spending. Governor Martz has tried to simplify the tough budgetary decisions by saying: “We’re going to straighten this out. We’re not going to function that way.” But once again, Martz’s inexperience with the complex structure of government agencies, the interlocking requirements of federally funded programs, and the on-the-ground impacts of budget cuts belie her simplistic rhetoric.

The person who may be closer to the truth on what the coming cuts will mean is Gail Gray, the director of the huge Department of Public Health and Human Services. “It’s tough because there are no good decisions,” says Gray. “Every decision and reduction causes someone to lose a service that we think they need, or we wouldn’t have had it here in the first place.”

While some would argue with Gray’s logic that every government program is justified by the mere fact that it exists, there is little arguing with the impact of many of the programs she administers. For instance, the planned reductions of $27 million in spending from the state’s general fund actually amounts to a $58 million reduction because the state loses federal matching dollars for each of those state dollars cut. Her assessment of the impacts that such cuts will wreak is bleak: “When we’re talking about a 10 percent cut, we’re talking about total programs. We’re beyond a scalpel to make these cuts.”

Some experienced lawmakers, like Sen. John Cobb (R–Augusta), believe the impacts of the proposed cuts will be so severe that legislators, not just the governor’s office, should be called into session to hold hearings, listen to public sentiment, and then determine how best and least harmfully to make the cuts. So strong is Cobb’s commitment to this path that he petitioned his fellow legislators to call a special session for exactly this purpose. Unfortunately, while many Democratic members of the Legislature supported him, the governor’s office and most of Cobb’s fellow Republicans disagreed and he did not muster the signatures necessary to do so.

While it seems like a fair and logical thing to do, there are some reasons why Gov. Martz does not want the Legislature involved. For one thing, audits have found the Martz administration may be responsible for some expensive budget management mistakes they’d just as soon not revisit. Then there are the cost overruns, where agencies spend more than the Legislature has appropriated. While agency overspending was not uncommon during Racicot’s tenure, many of the revenue shortfalls engendered by a host of big business tax cuts hadn’t yet materialized. The agencies simply asked for supplemental appropriations and left it up to the next Legislature to straighten out the mess. But now that the impact of those tax cuts has materialized, there just isn’t enough money to cover the costs.

Unless something changes for the better, it is highly likely that the proposed budget cuts will become real on July 1, when the state starts its new “fiscal year.” And what will happen then? Gray’s agency says it will mean less care for mentally ill and troubled youths, reduced eligibility for medical care, reductions in Medicaid coverage (including decreases in dental and prescription drug payments), and a general reduction in poverty reduction programs for Montana’s families. These very real impacts will hit thousands of Montanans hard—especially so since the caseload of Medicaid and other assistance programs is rising, not falling, in the state. And this is just one of 20 state agencies.

To further complicate the budgetary quandary, July 1 is also the date on which the new, higher electricity prices under Montana’s deregulated power scheme are set to go into effect. In a weekend editorial, the Billings Gazette says: “The proposed power supply package would increase residential customers’ supply costs about 55 percent. That would mean an overall increase in the bill, including supply distribution and transmission, charges of about 20 percent.” This means state and local governments, schools, universities, and other institutions will be faced with higher power bills in the coming years. They will need more, not less, money just to keep the lights and heat on. The same increase will also hit nearly 300,000 Montana families and small businesses with higher electricity costs. As this ugly spiral escalates, it becomes undeniably clear that Montana is in a very tough situation.

So what can you, as a citizen, do about it?

The good news is that you can still tell the Public Service Commission to dump the current power portfolio and get citizens and small businesses a better price for their electricity at www.psc.state.mt.us. The bad news is, thanks to the governor’s refusal to call a special legislative session, there’s little input you can have about what gets hacked in the current budget. Next January, however, when this mess winds up in the lap of the 2003 Legislature, it will be time to address the structural tax and budgetary imbalances that created these horrendous problems in the first place.

Now would be a good time to quiz your legislative candidates about where they stand: New taxes on citizens or repeal the overly generous corporate tax breaks of the past? Then, come November, remember what they said—and vote accordingly.

When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Missoula Independent.

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