Governor calls special session to address budget shortfall

HELENA, Mont. (AP) — Gov. Steve Bullock called the Montana Legislature into special session next week to address a projected $227 million budget shortfall.

He proposes that a third of the shortfall be addressed through budget cuts, a third through temporary tax increases to pay for the state’s cost of fighting fires, and a third through transfers and other legislation.

Bullock, a Democrat, said Monday he has been negotiating with Republican legislative leaders to find a way to avoid making $227 million in budget cuts, which would have included $105 million in cuts for the Department of Public Health and Human Services — harming some of the state’s most vulnerable residents.

The proposal released Monday “represents where my negotiations with members of the Republican and Democratic Party leaders stand,” Bullock said in calling lawmakers into special session at noon on Nov. 14. Committee hearings would be held next Monday.

“It’s time Montana leaders fulfill our responsibilities to the people we represent and balance our budget in a way that makes sense for Montana taxpayers, workers, and families,” Bullock said.

Bullock is recommending cutting $76.6 million in general fund spending, temporarily raising taxes on hotels and rental cars to help cover the state’s estimated $70 million cost of fighting this summer’s wildfires while suspending state contributions to the employee health plan and the judge’s retirement system — both of which are running a surplus.

The health department would see a loss of $49 million in state funding through June 2019, with a corresponding loss of $60.5 million in federal funds. If forced to cut $227 million, the health department’s proposed $105 million in cuts would have brought a loss of another $136.6 million in federal funding.

Republican House Speaker Austin Knudsen of Culbertson said he didn’t believe a special session should be the first step in fixing the state’s budget.

“Let’s be clear here, the governor expects the legislature to raise taxes on hardworking Montanans before any effort to reduce non-essential services has been made,” Knudsen said in a statement. “There is a distinct lack of leadership from the executive branch, but my caucus will do what needs to be done to address the budget head-on while doing what Montanans elected us to do ... keeping in mind the taxpayers and those who utilize government services.”

Bullock said he’s confident lawmakers “recognize that the budget that they passed funded services that Montanans rely upon, and that’s what makes me hopeful that they will do the right thing and reach a deal.”

After the session, Bullock said he would order the $76.6 million in cuts.

It’s not clear how many jobs would be lost, but the recommendations include closing 19 offices of public assistance, some adult protective services offices and would require prior authorization for some Medicaid services. The departments of Corrections and Justice and the Office of the Commissioner of Higher Education would each see about $4.4 million in cuts.

The state needs a solution by Nov. 27, the point at which it must make $120 million in payments to schools.