Schweitzer's last stand 

Political columnist George Ochenski previews a legislative session that promises to be contentious

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Big issues

It's safe to say the biggest issue at the 2011 Legislature will be the budget. But it's equally safe to say that with more than 2,000 bills already requested, there's a ton of ancillary issues—like medical marijuana, environmental regulation, education, health care and social services—that promise to be both high profile and highly controversial.

The budget

Throughout the years, Montana has variously enjoyed times of plenty and times of severe budget shortages. This time around the money is short. How short depends on whose point of view you want to embrace.

click to enlarge Sen. Carol Williams (D-Missoula) - PHOTO BY CHAD HARDER

Schweitzer, whose legal duty is to present the Legislature with a budget, did so in November, lauding the state's fiscal condition. He claimed Montana is "one of only two states with budgets in the black" and aggressively defended his budget as "balanced."

Republicans disagree, and point to tens of millions of dollars of fund transfers in the governor's budget. They say it's "structurally unbalanced" because projected revenues do not meet projected expenditures without the fund transfers.

While this may seem an arcane point to many people, the issue is significant. For instance, one of the governor's fund transfers takes almost $18 million from the Treasure State Endowment Program, and nearly $5 million from the regional water system account, and sticks it all in the general fund. The move, contained in House Bill 11, and carried by Rep. Jon Sesso, is troubling for several reasons. First, those funds are intended for use by local governments to help finance necessary infrastructure projects. By moving the money to the general fund, local governments that developed and submitted successful grant applications now face a grim choice—either drop the projects or shift the funding to the backs of local taxpayers.

Even worse—and a point that bolsters the Republicans' contentions—is that the bill makes a change in law to allow such transfers at any time in the future. So now, instead of having a stable program to which local governments know they can turn, there will be no guarantee that future legislatures and governors won't simply de-fund the program whenever they need a few million more to "balance" their budgets.

Likewise, a similar measure, HB 42, carried by Rep. Galen Hollenbaugh, D-Helena, performs similar fiscal sleight-of-hand—and makes a similar law change to allow fund transfers into the future. Hollenbaugh's bill would pull $6 million from the state's coalbed methane account to the general fund.

Current law says: "Money deposited in the account must be used to compensate landowners and water right holders for damages attributable to coal bed methane development as provided in this part." It's not like Montana has come anywhere close to determining the full impacts from coalbed methane extraction, especially as projections are for tens of thousands of new wells to be drilled in the future. Once again, ripping off these dedicated funds to balance Schweitzer's proposed budget is extremely shortsighted.

But as Sen. Lewis, chair of the Finance and Claims Committee, pointed out: "To do the transfers, those bills will have to pass." It is telling that Democrats, not Republicans, are carrying the bills to do so—and given the fact that Democrats hold less than one-third of House seats, the chances of those bills ever making it to the Senate are slim indeed.

All of which brings up the harsh reality facing the state: Without the fund transfers, Schweitzer's budget doesn't work because it isn't balanced. Consequently, the Republicans, if they stick to their guns about seeking a "structurally balanced" budget, say they'll cut around $383 million in proposed spending from the governor's budget to be in line with shortfalls in future revenues. Where they cut that money will be the nexus of the budget battle and will roll across all the various agencies and divisions of government.

The real "off-budget" 800-pound gorilla in the Capitol, however, is the nearly $3 billion shortfall in the Public Employees' Retirement System and the Teachers' Retirement System. The enormous losses both systems incurred in the stock market crash have left their ability to cover future benefits in serious jeopardy. It's not something Schweitzer takes into account with his claim of the state "being in the black," but there are already highly contentious bills that would, if they pass and become law, significantly change the pension system.

Since state retirement pensions are based on an employee's top three years of earnings, Sen. Dave Lewis, R-Helena, has said he'll seek a state referendum to cap most state employees' salaries at twice Montana's mean household income. Needless to say, the proposal has set the public employee unions on fire, in no small part because by using the referendum, the Legislature can skirt the governor's veto pen and go straight to the ballot box in the next election. You can bet Lewis won't be the only one using referendums to nullify veto power.

click to enlarge Sen. Dave Lewis (R-Helena) - PHOTO BY CHAD HARDER

The environment

Plenty of people will argue there are more important issues than the environment. But without clean air, water and land, humans are toast.

So far, Montanans have set examples of environmental protection that are the envy of the world. The Montana Constitution requires reclamation of all lands disturbed by the taking of natural resources. It also guarantees every Montanan a "clean and healthful environment." Our citizen-passed bans on nuclear wastes and, more recently, on the perpetual pollution caused by cyanide heap-leach gold mining are testaments to the love and respect with which Montanans treat their homeland. And the foundational Montana Environmental Policy Act guarantees every Montanan the right to take part in major actions of their government that affect the environment.

But now, all those shining lights in the dim gloom of an industrially polluted world are at risk. Already there are hundreds of bill draft requests to change—mostly for the worse—Montana's environmental laws. Make no mistake, the Republicans and even some Democrats have targeted the reduction or elimination of environmental regulation as their main goal this session. When Speaker of the House Milburn released the GOP "priority list" early this week, he said: "Our main objective is to help natural resource opportunities." Of course the old saw that you can somehow make it easier, quicker and less risky to develop extractive industries and still protect the environment was trotted out once again. But Montana's long experience and history with the aftermath of mining, drilling, logging and power plants suggests just the opposite.

Unfortunately, this is one more arena where the governor and the Democrats who follow his lead have painted themselves into a corner. Schweitzer claims "jobs are my No.1, No. 2 and No. 3 priority," and his words were echoed by Democratic Senate Minority Leader Carol Williams last week.

And so the bogus "jobs versus the environment" argument is back in play. But if jobs are the No. 1 priority for the governor and Democratic legislative leadership, as well as the Republican majorities, where does that leave the environment? Here's a hint: Tim Lindsay, chairman of the board of Revett Minerals, told legislators at last weekend's "business forum" that the state needed to streamline its permitting process and not allow it to get waylaid by legal actions or other delays. In other words, if you live downstream, downwind, or use water in the vicinity of natural resource extraction projects, your future may well be in jeopardy in the next four months.

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