Missoulian Editorial: Special session needed to reduce cuts, raise taxes

This summer brought deeper-than-expected shortfalls in revenues and steeper-than-anticipated increases in spending to fight wildfires, squeezing the state budget on both sides and triggering painful cuts to crucial agency programs.

Not only are Montanans not happy with the current budget proposal, neither the governor nor legislative leadership appears satisfied with it either. That being the case, the obvious solution would be to convene a special legislative session focused on recalibrating spending cuts to lessen their harm while also adjusting tax rates to bring in additional revenue.

A special session would cost the state even more money, and should be called only if and when Montana’s leaders fully grasp the urgent need to negotiating a new deal. The frustrating thing is that neither Montana’s governor, a Democrat, nor Republican majority leaders have given any indication they are willing to shoulder such a responsibility and meet in the spirit of compromise. Until they do, Montanans must brace ourselves for some dramatic reductions in state services – reductions that will be painful enough in the short term, and even more excruciating over the long term.

As Montana’s executive, Bullock ought to take the leading role on this. He should immediately begin pulling the legislative leadership of both parties together for talks, asking them to develop realistic options that could be considered in a special session.

Remember, it was only a few merry months ago that the Legislature passed, and Governor Bullock signed, legislation containing spending reduction blueprints. Senate Bill 261 led to a 5 percent round of budget cuts, while House Bill 2 will cut an additional 10 percent. The state is required by statute to maintain a certain ending fund balance – and also requires that no more than 10 percent be cut from each agency program.

This means that in order to make up for its $227 million shortfall, the state must cut nearly the full amount allowed by law from each program. The cuts in HB 2, along with other reductions in another fiscal revision bill, Senate Bill 261, add up to $218 million.

Each agency has submitted proposals for reducing their expenditures, and most were able to identify difficult but justifiable areas in which to trim some fat. In the case of the Department of Health and Human Services, however, the cuts hit bone.

DPHHS is by far the state’s largest agency, accounting for about 85 percent of the total budget. This is because so much of DPHHS’s state funding is tied to federal dollars. A required $105 million in cuts to the agency would mean the loss of an additional $135 million in federal funds, for a total loss of $240 million.

According to the Montana Budget and Policy Center, the proposed cuts to DPHHS would mean:

• Eliminating health case management for foster children,
• Ending payments to foster parents to help cover the cost of diapers,
• Cutting services for 300 children with low vision or blindness,
• Closing 19 offices of public assistance in rural Montana,
• Reducing funding that supports teen moms by over $2 million,
• Ending partnerships that evaluate child victims of violence, shifting this cost back onto local law enforcement agencies,
• Trimming funds for domestic violence shelters,
• Cutting $48 million from case management services for individuals with disabilities,
• Eliminating $10 million from a program that helps development disabled and at-risk children from birth to age 3,
• Ending prescription drug benefits for more than 10,000 Montana seniors,
• Cutting home- and community-based services, hospice services and long-term care for seniors, and
• Losing $1.6 million in chemical dependency treatment.

The list goes on. It’s not hard to see how the loss of these services will cost local communities more. Hospitals and health care providers, police and prisons, municipal and county agencies will all feel the impact, and have to make up for the reduction in state support. Meanwhile, communities and families will suffer.

Nearly 200 individuals spoke about how the proposed cuts to DPHHS would affect them at a legislative committee hearing last week, after which legislators voted for the second time to informally object to the department’s budget plans. Their actions delay the implementation of these particular cuts, but do nothing to solve the department’s – or the state’s – fiscal problems.

The state is also facing reductions in Montana State Prison personnel, the likelihood of closing the new crime lab in Billings and the further loss of funding to the Montana State Hospital – all of which could lead to the kinds of conditions that result in expensive lawsuits.

Republican legislators must realize that these cuts have very real costs. Funding cuts made to education at the state level must be made up in tax hikes at the local level. When the state’s most vulnerable cannot access the basic support they need at the onset, they end of requiring more extensive – and costlier – services down the line.

Just as Governor Bullock’s office must work to identify the least painful places to make agency cuts, legislators must work to identify the least painful ways to raise revenue.

We’re not convinced that the spending reductions proposed so far represent the best Montana can do. Anyone who’s ever looked at a balance sheet knows it’s easier to shuffle numbers around if one doesn’t consider the real-world impact of budget adjustments. Montanans must make sure our legislative and executive leadership is giving the utmost consideration to the effects of their budget dealing.

Far less important than how we got to this low point is what we are going to do to climb back out of it. Montanans must demand that those with the authority to do so re-think the heavy-handed cuts, explore potential sources of additional revenue – and demonstrate their willingness to compromise on a new budget for the good of Montana.