Montanans voice mounting concern about the impact of federal budget cuts and tariffs. Montana's governor and congressional delegation don't seem to share those concerns. And the Montana Legislature faces a busy, and possibly contentious second act.
Capitol Talk is MTPR's weekly legislative news and analysis program. MTPR's Sally Mauk is joined by Montana Free Press State Editor Holly Michels and Lee Banville, Director of the University of Montana School of Journalism and Professor of Political Reporting.
Sally Mauk: Lee, as the Trump administration and Elon Musk implement broad agency cuts and international tariffs, pockets of resistance are showing up around Montana; everything from protest rallies to letters from concerned county commissioners. And they're all warning of potentially dire consequences for Montanans. But so far, their concerns are not gaining much of a sympathetic audience with Montana's congressional delegation.
Lee Banville: Yeah, I mean, a lot of the complaints right now, I think they're being sort of categorized as partisan reactions to efforts by conservatives to rein in the federal government. But I think you're also starting to see bubble up the economic impacts of a lot of these things. So whether we're talking about agricultural commodities being affected by the tariffs, or you're starting to see industries — tourism, for example, that might be worried about what's going to be happening this summer. As we start to see those bubble up, I think we're starting to see a little bit of uneasiness. Plus, I mean, it's sort of like the stock market where there's uneasiness there. And so, you know, I think what we're starting to see is the first wave of, 'Okay, is this a transition period?' As the Trump administration is describing it, where they're actually reorienting the economy to the United States, and this will actually lead to economic growth? It's a pretty big gamble, because the alternative is that what we see is ... some pretty gnarly ripple effects that actually may start to foment into real opposition. Right now, it's more these little outbursts, but what we're starting to see is they're not all coming from Democrats who are angry about, you know, X policy. It's much more starting to see, like, people who will be affected by the policies on a day -to -day basis, and so that will be interesting to see. Does that turn into a chorus of opposition, or does it really remain these outspoken voices that are popping up in different spots?
Sally Mauk: Montana, Lee, has especially close ties with Canada. As you know, besides the shared border, they're our biggest trading partner, and a huge part, as you mentioned, of our tourism market. But Congressman Ryan Zinke did recently acknowledge — sort of — how the tariffs on Canada could hurt Montana.
Congressman Ryan Zinke: Montana, because of our vulnerability, is going to get hit probably more than anyone else, certainly on the upper tier, because our trade is Canada. And Montana has a long, long tradition with Canada. The first Special Forces service was from Canada. I'm a former Navy SEAL. So, our relationship between Montana and Alberta has been long. I'm hoping the tariffs are short lived, because it will have uneven consequences across our country.
Sally Mauk: 'Uneven consequences' Lee, whatever that is.
Lee Banville: Well, I mean, he's sort of raising a bit of a yellow flag there. He's like, 'Look, we're going to get hit worse than, you know, Florida when it comes to a Canadian tariff.' And so that is, I would say, a very veiled reaction of like, 'I'm a little uneasy about how this may hurt us.' He, in fact, says that he hopes that they're short -term, it's more a negotiating tactic than a policy, which is not what the Trump administration is saying is the plan, but that has been how these have rolled out — but that has also in itself caused a lot of uncertainty in businesses that are reliant on that trade across the border. So I would sort of take that as a little bit of a yellow flag coming from Congressman Zinke who sees the day-to day potential impact of the Canadian tariffs being more significant for his constituents than other members of Congress.
Sally Mauk: While a lot of the pushback to the cuts and tariffs are coming from Democrats, there are, as Lee mentioned, a growing number of conservative voices sounding the alarm, Holly. And here's what the president of the Montana Chamber of Commerce, Todd O'Hair, had to say about the tariffs.
Todd O'Hair It is creating a tremendous amount of uncertainty amongst some businesses in this economy as far as what these impacts are going to be. And so everyone is sitting by with a lot of trepidation on what all this means.
Sally Mauk: A lot of trepidation might be an understatement, Holly?
Holly Michels: Yes, Sally, I think, like a lot of things with the Trump administration, there's a lack of clarity around tariffs with Canada. You know, they're in place, now they're delayed until April 2nd, but we've seen plenty of things change very rapidly, so we'll see where things land. But it is causing a lot of what we heard from O 'Hair there: trepidation, confusion, just concern as people wait to see what actually shakes out.
Given what you and Lee were just talking about, the Montana economy is really tied to trade with Canada, so there's a lot of reason for concern. We're hearing from other conservatives in the state. State Senator Mike Cuffe, who's a Republican from Eureka, he told Montana Free Press that he's not crazy about tariffs and is worried about what might happen.
We can see livestock impacted. We're also hearing from grain producers who use fertilizer made with imported ingredients, who said prices have already gone up for fertilizer, and it's just a lot of businesses affected. Montana beverage producers who can those beverages are saying they get cans from Canada; their costs could go up. There's just a long tail to the tariffs here.
There's also concern that frustrations with the U.S. could lead to a decline in tourism, which would be a real hit to areas like the Flathead, which usually benefit from money Canadians spend locally. I think a lot of folks are just nervous about what may or may not be impacted as we see what unfolds.
Sally Mauk: There was a story recently that Canadians who have second homes in the Flathead Valley are selling those homes, not wanting to keep a property in Montana. Gov. Gianforte, Holly, remains all-in with Trump's tariffs.
Gov. Greg Gianforte: I'm proud of the fact that we finally have a president standing up for America in our trading relationships.
Sally Mauk: So, there's one who has no trepidation, Holly, about these tariffs.
Holly Michels: Yeah, Sally, Gianforte has not been critical of Trump here. Montana Free Press's Matt Hudson asked Gianforte at a recent press conference about tariffs, and he, like Trump, has cited fentanyl concerns in discussion about these tariffs that fentanyl would come through to the U.S. from Canada. Gianforte did acknowledge tariffs could create some disruption, but he didn't talk about specifics for the Montana economy.
And it's worth pointing out that data shows that less than 1% of fentanyl confiscated in the U.S. comes from Canada, so even though it's being raised as a reason for these tariffs, that's not the main or even a major pathway for the drug or its ingredients into the country.
Sally Mauk: Well, Lee, it takes a while for the full impact of the cuts and the tariffs to be felt, as you mentioned, and one wonders when or if the patience Trump is asking for is going to wear thin, even for his supporters.
Lee Banville: Yeah, you heard it from the Chamber of Commerce. Uncertainty is a four Vletter word when it comes to the economy, businesses, the stock market. Think about if you're a grain producer like Holly was talking about. I mean, you're, you're making a bet on a year from now and you want to know that the products you're growing are going to have a market and you're going to be able to recoup your expenses. And so, they're making that gamble now. And this is a scary time to be making a gamble on anything when it comes to what the economy will look like in a year.
We have seen some actually continued positive signs in the economy. The jobless numbers have been quite strong. There could be an argument that actually this will reorient the U.S. economy to the U.S., that this transition period will lead to some period of economic development later on. But we are in the gnarly middle waters of, if that's where we're going to end up. Getting there is going to take a lot of reorienting by a lot of businesses, by a lot of commodity producers and all these others. And so are we willing to go through this process? The federal government seems intent on taking us that direction. And yet, as the governor watches agricultural producers or — even like Holly talking about- aluminum cans that you need to can some of the beer and other products that are made here in Montana. If those skyrocket and those prices continue to soar, I mean, a lot of what drove the election of President Trump and the reelection of Governor Gianforte was the focus on making a strong economy. And if it starts to seem like the economy is anything but strong, you could see a real backlash. But this is, again, a thing that's going to take months to play out, also amid all the lawsuits that are all sort of floating around that are also adding to the uncertainty. It's a fascinating time, because you're going to look back at this time and be like, either, 'They were spot on, and they saw the future, and wow, thanks for doing that', or you're all going to be like, ‘Wow, why did you do that?'
Sally Mauk: Holly, the Legislature has just reconvened after a week-long break, and they still have a lot of work to do, and as we've talked about before, there is bipartisan support for Medicaid expansion and some form of property tax cuts, but there are likely big fights yet to come over the state budget.
Holly Michels: Yeah, Sally, we've got a lot to get through in the second half here up at the Capitol. Like you said, we have seen several property tax proposals that all made it through the first round of the session. That includes Gianforte's Homestead Exemption, the Democratic competitor to that, as well as the Democratic proposed income tax credit to offset property taxes. And there's also still a competing Republican plan to use some bed tax to offset property taxes. But as we get into the second half and move toward the end of the session, legislators are going to need to narrow that down. That's probably going to cause some friction there.
And like you said, the huge issue, the only thing they're actually required to do by law here is pass a balanced budget. You know, subcommittees have wrapped up their work on House Bill 2, which is the budget bill, and that'll hit the House floor sometime in the coming weeks. There's generally attempts to change that bill on the House floor. or sometimes majority Republicans communicate to their caucus that they want to respect the work these subcommittees did and they don't want to make big changes when the bill is on the floor. But that's not always what happens and Democrats often try to get priorities of theirs that were maybe cut earlier or just never in the budget to start with into that bill.
Then the bill goes over to the Senate and then the Finance and Claims Committee reviews it and as they get it they're also seeing a lot of other spending bills come their way so we often see the budget narrow at that point. And then it'll go before the full Senate, back to the House for amendments.
So, there's a lot of points for big changes in debate on that budget. And then there's also some really big policy things outside of what we've already talked about with property taxes. There are also major bills to alter the Montana Environmental Policy Act. There are bills to change how elections work in the state and a lot more policies that still need to get hammered out. And then of course there's always this end game where we see several key bills and policies tied up, their fates connected at the end of the session, so we'll be watching to see what emerges there.
Sally Mauk: Well, another remaining fight, Lee, is over legislation to make the judiciary overtly partisan. And here's what House Speaker Brandon Ler had to say recently.
Brandon Ler: House Republicans are committed to passing partisan judicial elections so that Montana voters can hold judges fully accountable to the same standards as every other elected official. Our courts have been left unchecked for far too long.
Sally Mauk: And for Republicans, Lee, this is a matter of transparency. They argue judicial candidates are inherently partisan, so why not be public about their politics?
Lee Banville: Yeah, that is a thing that we still see some pretty deep divisions between the judiciary and the legislative branch of the newly elected Chief Justice of the Supreme Court, who was assumed to be a sort of Conservative voice on the court, expressed opposition to this idea. And yet, yes, the Legislature sees this as a way of implementing a sort of more transparent — or more informed — you know, because a lot of these elections, people don't really know a lot about judicial candidates. And so the argument is, well, if you have a party identifier, that's easier for voters to understand what you're getting when you vote.
But I also think that it kind of misjudges exactly how the judiciary views itself when it comes to Conservative and Liberal, versus Republican and Democrat. Because a Conservative can adhere to the Constitution and implement something that might feel like a progressive act because of the Constitution about the documents that they're interpreting. And so it doesn't quite cut the same way as a legislative race or a gubernatorial race, but it remains one of the top priorities. They've been working on it for years and it's clear it's going to come to some kind of head in this session and see if they're able to get it through, which I think is still an open question.
Sally Mauk: Well, lots of work left and House Majority Leader Steve Fitzpatrick says they're ready to get to work.
Steve Fitzpatrick: When we do come back, we will be putting the pedal to the metal. We're going to be working six days pretty consistently all the way to the end.
Sally Mauk: Are you ready, Holly, to put the pedal to the metal?
Holly Michels: No. I should be more rested after the break we just had. I'm actually in an office at the Capitol right now looking at a schedule from a past session that started on the same day in January that we did this one, and I'm clocking that their transmittal break was March 5th through 10th, which is much earlier than ours hit, and I think that's a testament to just how kind of backlogged things got this first half of the session and also just lawmakers bring a lot more bills than they used to in the past, there's just an appetite to do more.
So Fitzpatrick is not wrong there, there's a lot to get done. We're looking at, I think he said, we're going to have a lot of six-day weeks up here, which is working Saturdays, which didn't used to be the norm, but they're moving more toward using those Saturday sessions trying to get us out. I think their end date is May 3rd, what I'm seeing right now. That would be our 90 days. And I have heard Democrats raise the idea at the end-of-the-first-half press conference that there might be an appetite to maybe try to save some days, which is something they generally do anyway, to be able to come back and tackle any issues that might come up with the changes at the federal level that might affect the state budget. So I think we're going to see a lot work pretty quickly done here as we get into the second half.
Sally Mauk: All right, well we'll all take a deep breath, and we'll follow it as it unfolds. Holly and Lee, thanks and I'll talk to you next week.
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