Montana budget cuts: Looking back, and moving forward

Apr 25, 2018

By Tara Jensen

KPAX It was a difficult 2017 for many working in health and human services -- and for those in need of their care -- as massive budget reductions have undercut programs statewide. The consequences of these cuts remain to be seen in some cases, but for others, there were immediate ramifications. The 2017 state budget cuts have slashed services for Montana’s vulnerable populations, from social work to healthcare to the criminal justice system. Heather O’Loughlin, who directs the Montana Budget and Policy Center (MBPC) -- a non-profit, non-partisan research group that examines state and federal policies -- says this happened in part because the legislature did not pass measures that could have created revenue for the state. “I think there a lot of legislators that had a hard line of no revenue measures, or no increased taxes, and what we have seen is that resulted in pretty significant pressure and burden on our most vulnerable populations, and the folks that provide services to those families and individuals. And those cuts are going to have a ripple effect throughout communities, and long-term implications,” O’Loughlin said. During the 2017 regular legislative session, the Montana Department of Public Health and Human Services was hit with about $29 million in budget cuts. The reductions came from general budget cuts, vacancy savings, and by de-funding some Medicaid services, according to an MBPC report. Additional cuts were triggered in the summer after the legislature had adjourned thanks to Senate Bill 261 that kicked in if state revenue projections came in below what lawmakers expected -- and they did. The MBPC reports states that once the additional cuts were triggered, over $17 million were automatically sliced out of the DPHHS budget. The money was cut from several areas including Medicaid reductions, targeted case management, and unfunded state employee pay raises. The final round of general fund cuts came during the November 2017 special session, where over $49 million was removed from the budget. What made the cuts to the DPHHS particularly severe was the matching federal dollars that were lost when the state dollars were reduced. During the special session alone, the $49 million cut resulted in an additional $60 million loss in federal money thanks in large part to Medicaid reductions. A single state dollar spent on Medicaid services is matched with one-to-two federal dollars depending on the program -- so that loss adds up. Throughout all of the 2017 budget reductions. Montana lost 100 million federal dollars. In total, that’s over $200 million in cuts to services funded through the DPHHS, according to the MBPC report. DPHHS Director Sheila Hogan says the department responded to the cuts by prioritizing 24/7 services in the community as well as in the Child and Family Services (CFS) division. “[You] exempt the 24/7 people from any reduction in force -- because you need...24/7 people in facilities. We [need] 24/7 people in the call center, for CFS. We need social workers who can work 24/7. So we’ve exempted all of those people,” Hogan explained. Hogan added that overall, DPHHS has eliminated close to 400 employees in the operations and administrative offices. The existing budget losses are now set in stone until the 2019 legislature because lawmakers opted to make the cuts into law during the special session, according to O’Loughlin. Legislators didn’t have to make the decision and when they did, it ended any possibility for the damage to be minimized before the next legislature. “There’s not a lot we can do until the next session. That is really how it impacts this discussion. I think people are hopeful, but when those budget cuts were taken permanently out of the base, it impacts services today, and it's going to impact the work we do in the next session,” Hogan said. But In the meantime service providers and those in need of care, are making some tough adjustments.