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Montana politics, elections and legislative news

Parts Of The State Budget Fix Remain In Limbo

Office of the governor, budget and program planning.
William Marcus
Office of the governor, budget and program planning.

The maneuvering to fix the state budget is still playing out following the special session earlier this month as some key pieces have yet to slide into place.

Lawmakers left the state Capitol about a week and a half ago with a package of bills that filled the state's projected $227 million budget shortfall. As a result of some of that work, Governor Steve Bullock announced Monday that state’s credit rating remains strong.

"Thanks to the work that we got done during this legislative session, our bond rating has been renewed at a AA level. And I think it is a big deal not only because our credit rating not only impacts our state's ability to bond, also our state rating can impact local government’s ability as well."

Bullock says he expects the AA rating from Standard and Poor’s to reflect the opinion of other leading bond rating agencies.

Late last week, Governor Steve Bullock took action on the bills passed by lawmakers in the special session. Bullock allowed most of the roughly dozen bills sent to his desk to become law.

Another bill signed by the governor attempts to put a fee on Montana State Fund investments. It would raise nearly $30 million over the next two years. It’s a key piece of the package. The State Fund is currently challenging that legislation in court.

Republican Speaker of the House Austin Knudsen says although he voted for this law, and still supports it, it appears the Governor Bullock is applying some political leverage the situation.

“The governor’s office is obviously trying to put some pressure on the State Fund board to withdraw that lawsuit,” says Knudsen.

On the same day the lawsuit was filed, Bullock shuffled around members of State Fund board. That board had previously voted unanimously to challenge the legislation the governor signed.

Bullock replaced two of its 7 members on the Friday after the special session.

A spokeswoman for Bullock said the governor's office did not know about the lawsuit before the appointments were made. The State Fund made known their intent to challenge the legislation well before it went to the governor’s desk.

The State Fund board abruptly booked a meeting for this coming Wednesday to discuss, and possibility to reconsider, the lawsuit challenging  that legislation.

In a meeting with the capitol press Monday Governor Bullock criticized the State Fund for not accepting the law.

"I think the State Fund has a long way to go before it'd be successful in that lawsuit, and I think what they ought to do is follow the law that the Legislature passed," Bullock says.

Two of the bills that Bullock chose to veto includes legislation that would furlough state employees to save the state $15 million.

Republican Speaker of the House Austin Knudsen calls that bill good policy, but he says many Republicans knew it won’t win the governor’s support.

"I wouldn’t say there was ever an expectation that the governor was going to sign that bill or let it become law. His office made it very clear very early in the special session that they did not think much of that bill," Knudsen says.

Governor Bullock also vetoed a bill to allow the state insurance commissioner to look into waivers to establish high-risk insurance pools.

The governor allowed several of the Legislature’s main bills to balance the budget become law without his signature. Bullock says the Legislature overstepped its power by tying bills together that could force more budget cuts if parts of them were vetoed by the governor. 

Even though that package of legislation establishing government transfers, and effectively making permanent budget cuts is now law, it’s still unclear how a major piece of that jigsaw of legislation will resolve.

That’sa potential $30 million deal with the state’s only private prison. The governor has not made it clear yet if he will accept that deal.

Several of the budget balancing solutions got the governor’s signature last Friday without issue.

Those included one to temporarily suspend contributions to judges’ retirement system and another for a short term suspension of payments to state employee health care plans.

Lawmakers will soon have a clearer picture of the state’s revenue picture to add additional context to the special session work and resulting complications.

Early next week they will hear an update on the state’s latest earnings. This report will shed light on whether incoming tax revenue will reduce the size of the projected $227 million budget shortfall.  

Corin Cates-Carney manages MTPR’s daily and long-term news projects. After spending more than five years living and reporting across Western and Central Montana, he became news director in early 2020.
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