MTPR

Some State Budget Cuts To Be Reversed, Gov Says

Jul 25, 2018

Governor Steve Bullock says state agencies will soon see some of the more than $70 million in state budget cuts made during last November’s special session restored, because state revenues have bounced back.

“As we close the fiscal year we find that we’ll have the ability to put about $45 million to restore some of the cuts that occurred,” Bullock said.

During the special session that Bullock called in the face of an estimated $227 million shortfall, the Department of Public Health and Human Services saw its budget cut by roughly $49 million. That’s more than four percent of its budget.

Most of the budget restorations announced Wednesday will go back into the DPHHS.

“The Medicaid provider rate cuts of 2.99 percent. Immediately restore those. So there won’t be those cuts for the next fiscal year,” Bullock said.

The Montana Health Care Association is currently suing the state in protest of the nearly 3 percent cut to provider rates.

Rose Hughes, the executive director of the association, says even if the rates are restored for the next year, that doesn’t take care of harm caused by the cuts last year, among other issues.

"We raised issues about violations of our rights to participate and to receive information that we needed to understand and respond to the cuts. That is a very important part of the litigation and we would be inclined to pursue those issues so they don’t happen again," Hughes says.

Some Medicaid providers in the state, who serve the poor, elderly, and disabled, have blamed recent layoffs, business closures, and service reductions  on cuts made to Montana’s health department budget over the last year.

“Even through this challenging budget time we figured out a path for targeted case management for the developmentally disabled," Bullock said today. "We’re working on a plan to restore targeted case management in mental health.”

DPHHS Director Sheila Hogan and state Budget Director Dan Villa are scheduled to hold a listening session on the morning of August 1 at the Great Northern Hotel in Helena about the restoration of cuts to the health department.

During a press conference Wednesday morning Governor Bullock also announced that the state has come to an agreement to extend the contract with CoreCivic, the company operating the private prison in Shelby.

During the November special session, Republican lawmakers put pressure on the Governor to extend CoreCivic’s contract, which was set to expire next June. Doing so, they said, would create more than $30 million that could be used to offset state budget cuts and refill the state’s depleted fire fund.

Some Democratic lawmakers, and the American Civil Liberties Union of Montana oppose extending the private prison contract. The ACLU points to lawsuits and allegations of civil and human rights violations at CoreCivic facilities in Montana and other states. 

Negotiations for a new contract between between Montana and CoreCivic stalled in April, but this week the parties reached a deal that will result in Montana getting $34 million in exchange for a two-year contract extension, along with other provisions.

“They’ve agreed to allow the state provide human rights training to CoreCivic employees and inmates twice a year," Gov. Bullock says. "They’re going to fund three positions assigned and allocated at the discretion of our Department of Corrections for substance abuse abuse treatment and vocational education.”

The $34 million is money the state pre-paid towards a future potential purchase of the prison.

Bullock says the deal with CoreCivic was not made because of pressures to the state budget, but the money could help cover the costs of the upcoming fire season. While state officials say Montana's depleted fire fund won’t stop firefighting efforts this summer, the size of this year’s fire season could add stress to the budgeting process during next year’s legislative session.

“Having an extra $34 million is huge in this year coming up," says Nancy Ballance, the Republican chair of the Legislative Finance Committee.

“We don’t know what kind of a fire year we’re going to have. If we end up anywhere near what we had last year, then we could have a problem. I think the good news is that the revenue collections show that we're back on track. We had a couple of anomalous years, but now we are back on track.”  

Governor Bullock says details on other areas of the budget that could receive backfills because of the improvement in revenues will be announced before September 1.