Slicing the surplus 

Schweitzer plan puts Republicans on their heels

One of the strangest debates in Montana political history is going on right before our very eyes over what to do with an estimated $547 million in “surplus” revenue. The quotation marks around surplus are intentional, since it’s tough to figure out whether the surplus is real, imaginary, or simply something over which politicians can posture and argue. What is undeniably real, however, are the antics of Republican leaders that have tied both history and ideology in Gordian Knots, making one wonder what strange brew they’re keeping in the water cooler at Republican headquarters these days.

Those who have been observing the fiscal behavior of Gov. Brian Schweitzer’s administration would generally agree that he has been cautious in his approach to the state’s budgeting process. So cautious, in fact, that during the 2005 legislative session his budget director, David Ewer, was referred to as “Doctor No.” The moniker came from Ewer’s two-letter response to virtually every spending proposal brought forth by legislators, lobbyists and sometimes even the governor’s own staff.

For those of us who are social progressives but fiscal conservatives, it was a huge relief to see a Democratic administration face the demands of its own majorities and keep spending in line with revenue. On the other hand, you could hardly blame the education, social services and health care communities for trying to backfill the open pits left behind by 16 years of Republican administrations that just loved to give tax breaks to industry while cutting programs that benefit the general populace.

While Schweitzer’s actions angered some, they seemed reasonable because he had just stepped into the governor’s office and inherited what remained after Judy Martz’s less-than-stellar administration. It seemed prudent to give Schweitzer a little time to find out if and where the books were cooked and what the fiscal future might look like before jumping into wholesale spending.

What the cautious approach also accomplished, besides laying the foundations for today’s surplus, was toss the Republicans into a befuddled tailspin from which they have yet to recover. Suddenly, their well-worn and highly successful “Tax and Spend Democrats” label just didn’t seem to stick anymore. Not only was Schweitzer holding the purse strings tightly, he also refused to allow new taxes. The combination proved disastrous for the Republicans and, despite the experience of their legislative leaders, the new governor handed them their heads on a platter by the end of the session.

In the interim since the legislature adjourned, however, the state’s fiscal picture has become more clear. Thanks to a significant increase in both income and corporate taxes, the state is, for the first time in a long time, looking like it just might have a little spare coin in the coffers. Republicans are trying mightily to say the surplus is a result of their brilliant leadership over the last decade, and I guess twisted logic could find it so. After all, if it wasn’t for the disastrous leadership of Republican president George Bush, coupled with the equally disastrous rubber-stamp Republican Congress, the nation wouldn’t be in a quagmire in Iraq and Afghanistan, the Middle East wouldn’t be so violently destabilized, and the price of oil wouldn’t be $75 a barrel—which is about twice what it was before these geniuses took over the country.

If that works for you, feel free to thank the Republicans for the increased revenues from oil and gas production Montana is currently experiencing. On the other hand, when President Clinton left office the federal budget had a surplus, not $9 trillion in debt with no end to the runaway deficit spending in sight. And remember, it’s we who are paying the inflated energy prices, so while we’re increasing Montana’s surplus, we’re each and every one of us taking the hit in our own wallets.

As Montana’s millions of surplus dollars turned to hundreds of millions, however, Schweitzer and his canny Dr. No realized that sooner or later they were going to have to make plans for the money or face a tsunami of spending requests from all sides. Initially, Schweitzer declared there effectively was no surplus due to a long list of state needs ranging from underfunded retirement programs to the ongoing school funding debate. The needs, said the governor, would have to be addressed first, and then we’d see what the surplus looked like.

The Republicans, once again using the same tired playbook they inherited from their Newt Gingrich glory days, declared they would give the money back as Gov. Racicot had done, with miniscule rebates that most Montanans never even noticed. Or they would lower property taxes permanently, or they would lower college tuition, or they would come up with a whole new plan, or, or, or. Mostly, it’s election year blather, since any Republican plan will have to make it by Schweitzer’s veto pen before it can become law—and if Schweitzer doesn’t like it, it ain’t gonna happen.

Never one to sit on his laurels while his enemies attack, Schweitzer formulated a few plans of his own. $100 million should go for one-time $400 per home property tax relief for Montanans, says the governor—and only for resident Montanans, not the trophy home out-of-staters or the big corporations. Another $25 million should go toward rebates on the unpopular water tax and $100 million is slated to pay down the underfunded public employees retirement account. Education will need some more, and pretty soon there you have it—no more surplus and no more debate about what to do with it.

Of course Schweitzer, like the Republicans, will have to get his ideas through the legislature, where even the best-laid plans can go astray. But in the current debate, there can be little doubt that the governor’s populist logic has the upper hand. And the Republicans? Well, maybe they ought to dump the strange brew in their water cooler and start talking some sense.

When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at opinion@missoulanews.com.

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