The 2021 Legislature produced a balanced budget with a slight spending increase, some new restrictions on abortion, a fight with the state Supreme Court and a lot of fulfilled conservative goals. Holly, Rob and Sally give their final takeaways from the session and preview the upcoming race for Montana's new second congressional seat.
Listen now on this year's final episode of Capitol Talk with Sally Mauk, Rob Saldin and Holly Michels.
Sally Mauk The 2021 Legislature is history and they've passed a budget with only a slight increase in spending, some tax cuts and a projected healthy rainy day fund. A lot of this is possible because of a healthy infusion of federal funds and some projected new revenue from marijuana sales,
Holly Michels That's right, Sally. So we heard Republicans saying this budget has a growth rate of about 2.5 percent, which is lower than we've seen in the last two sessions. And those figures don't include what you were talking about, which is the American Rescue Plan Act money, which overall is $2.7 billion to the state, and really gives Montana incredible flexibility to do things it could never have afforded otherwise.
That's stuff like $275 million in potential for broadband investments that would have been entirely impossible before this federal money came along.
It also offsets the federal money about $85.8 million for infrastructure projects around the state. And that amount itself offsets another $25 million just in interest costs the state would have paid for projects that normally would be bonded, but now that federal money pays for in cash.
The structural balance, which is tracking that budget, doesn't overspend revenue estimates; we're now about $40 million in the black. We're leaving an ending fund balance estimated to be about $350 million. That's on top of $122 million in the Budget Stabilization Reserve Fund.
And also, depending on the fire season we have, but looks like a full fire fund, too.
And a lot of that this budget benefits from revenue estimates that improve since before the start of the session. But also, like you said, additional revenues coming in. New cannabis revenue. Some estimates have put it at about $52 million. That will go to offset about $120 million in tax cuts Republicans are enacting through things like reducing the state's top income tax rate, reducing the number of businesses paying the business equipment tax and making some property tax cuts, too. Those are all really big priorities for Republican Governor Greg Gianforte's tax plan. So that's where the budget sits.
I'll be watching as things go forward. A lot of this federal money, there's provisions that can't be used to directly offset these tax cuts. Lawmakers have put in flexibility that the bills can be adjusted if that's ever put at risk, when the Republicans are pretty confident that won't be the case, but that's one thing we'll be monitoring with this budget through the interim.
Sally Mauk Rob, Montana got the good news this week that we now have enough people to get a second congressional seat back. And there's already a familiar and controversial candidate who's announced he wants it.
Rob Saldin Yeah, exactly Sally, and really is good news for the state. You know, as many people have noted, this is going to double our representation in the House, double our representation on those committees. But I also hope that it makes the job of being a member of the House more appealing to more people. We've really had a revolving door back there since Denny Rehberg left. And what you really want are some people who will stick around, build up some seniority, identify some areas of legislative interest and expertise, get in a position to influence what legislation comes through these committees and gets to the floor. And that's just not something you can do in one or two terms. So splitting the district up, being able to concentrate on just a portion of the state, I think should make that a more appealing thing.
You know, it strikes me this is also really good news for Matt Rosendale. I think he was in pretty good shape to retain the statewide seat, but it certainly wasn't a lock. Well, assuming there's an eastern district and a western district, which is what we used to have, Rosendale is going to be in the eastern district, he would be in a much stronger position. You know, he could probably hold on to that as long as he wants.
And it's also really good news for Democrats who should be competitive if the lines are drawn such that we have something like the old western district. My sense is that there are some Democrats who are overconfident about their chances of winning that seat. I still think it's going to be really competitive, but Democrats are going to have a much easier path than they've had in the statewide seat.
And Sally, as you note, there's already a candidate. Ryan Zinke, who previously held the statewide seat. He has announced his intent to run. He's well known. I think he would be a very strong candidate, although I think Sally, as you suggested, you know, he comes with some baggage at this point. His stint as Secretary of the Interior was plagued by scandals.
There are going to be other candidates, though, on the Republican side. You know, I wonder about former Attorney General Tim Fox. And maybe former state Senator Al Olszewski, you know, would be another obvious candidate who sought the GOP nomination for U.S. Senate and for governor in previous cycles, he has a real following up in the Flathead. On the Democratic side, I'd say Steve Bullock would be the strongest candidate. But from everything I hear, he's not interested. There's obviously Kathleen Williams, although that be contingent on Bozeman being in the western district, which isn't necessarily a guarantee. But Kathleen Williams ran twice for the congressional seat, lost twice. I don't know how Democrats would feel about giving her a third try. There's also Whitney Williams, who ran for governor but lost the nomination to Mike Cooney. And there are going to be a lot of other candidates, too. I do wonder at some point if Democrats might also want to look beyond Helena and Bozeman and Missoula, which is where a lot of these people come from, as a means to try to do a little better in some of the rural parts of the state.
Sally Mauk The Legislature wants a say in how the new congressional district is drawn up, Rob. Here is how Republican Senator Steve Fitzpatrick put it.
Speaker 5 "People are concerned that we may not get fair districts, we may get some very gerrymandered districts, and this would just ensure that the districts are drawn correctly."
Sally Mauk But the Legislature, Rob, likely can't legally help draw that new district.
Rob Saldin Yeah, that's certainly my read of the Constitution. I'm doubtful that it would hold up. And this was tried a number of years ago, for the Legislature to take more control of redistricting, and it didn't work. I just don't know in reviewing the language of the Constitution, I don't know how it could be any more clear that this power lies with the commission, not with the Legislature.
Sally Mauk Holly, other legislation that was passed and signed into law by Governor Gianforte further restricts abortion in Montana. And the governor had a big signing ceremony on the steps of the Capitol and said this.
Speaker 6 "There were many who served in this building before us who championed the unborn; people who worked hard to advance the cause of life. Unfortunately, their efforts were vetoed. But not today."
Sally Mauk But the new laws, Holly, will surely be challenged in court.
Holly Michels Yeah, I think that's a fair expected outcome. We've talked about these bills before, but they generally would restrict access to abortion in the state. And lawmakers and a representative from the Susan B. Anthony Foundation, which is a group that is working across the country to end access to abortion, all hit on what we heard Gianforte say there -- that these bills have passed before, but were vetoed by Democrats and passed over legal concerns and also just a disagreement in policy. We have already this session seen two lawsuits, you know, from different reasons filed over bills Gianforte signed, both less than 24 hours after those bills were signed.
I talked with opponents to some of these abortion bills about what to expect in terms of litigation. And these are opponents who, through the legislative process, has said that litigation is a likely outcome if this were to become law. They've raised concerns about constitutionality of these bills, especially given some of the really strong privacy protections at the Montana state Constitution has. But what opponents are saying is in the waning days of the session that's now over, they needed to kind of see where things settled with all of the changes to abortion access before figuring out what legal steps would be next. There were still a lot of moving parts in the final days. There are also two born-alive proposals. We now know that a referendum which will put that question to voters in the next election is the one that cleared the session. There's one remaining bill that would ban health insurance plans sold on the federal exchange covering abortion care that Gianforte has not acted on yet. So I think once that gets settled, we can look to see what litigation might look like here.
Sally Mauk Rob, one issue that is not ending with the session's adjournment is Republican leadership's continuing fight with the state Supreme Court, which they vow to investigate in the interim.
Rob Saldin Yeah, exactly, Sally. This is the latest development in this standoff between the Legislature and the judiciary that we've talked about, you know, the last couple of weeks. And the allegation from Republicans is that the state Supreme Court justices and other judges are biased. And Republicans are pointing to a trove of emails that came to light that they claim show evidence of bias in that the judges were offering their opinions on pending legislation that was likely to come before them later. Well, the Legislature established a special select committee that's been looking into this matter in recent weeks. And now this week, the Legislature established a special counsel who's going to continue that investigation for the next two years and with nearly $300,000 to work with.
Democrats say this is all political power play, that the composition of the courts doesn't give Republicans the rubber stamp that they want and so Republicans are taking a two-pronged approach of, one, trying to remake the courts in various ways, but two, looking to undermine the credibility of the court in the eyes of the public with these claims of bias. Well, we know now that this thing is not going to have a quick, neat and tidy resolution. We're going to be hearing about this for at least the next couple of years. It looks like.
Sally Mauk Before we close, I'd like to get to each of your overall takeaways from this session. And mine is the effort by conservatives to influence, not just legislation, but all branches of the government, from what we just talked about with the court to efforts to stack state agencies with more conservative officials. It really was pretty blatant and unprecedented. Holly, what's your takeaway?
Holly Michels For me, a couple quick things. One thing I'm really curious about is, COVID really changed how this session worked in terms of the public being able to participate remotely. And I'm curious, just with that technology established, how much that can continue in further sessions or through the interim.
And then kind of building on your comment, Sally. This is the first session I've covered where Republicans are in control, both the Legislature and the governor's office, and that just really dramatically changed the tone of things up here. One thing that struck me, and maybe this is a little Pollyanna-ish, but looking at the way the public weighed in on bills and seeing bills that were GOP priorities, where the Legislature this time tracked opposition and support, and bills that had a lot of opposition but still cleared on party line votes and then were signed by the governor. It was kind of an interesting piece of that. And I do think that, too, also changed, sort of, the mix of, we talked a lot about the last session and before this session got going, in the middle of it, we've seen moderate and conservative Republicans clash a lot. And that was just much less, at least public, this session. It's been such a big storyline, but really different this year, I feel like. So a lot of that also really cares what Democrats are going to do after the session, what rebuilding looks like for them and how they try to take what happened this session and use it to be in a better position in two and then four years from now.
Sally Mauk And Rob, what's your takeaway?
Rob Saldin My biggest takeaway, Sally, is just how nationalized Montana politics have become. You know, we've mentioned this occasionally over the course of the session and dating back to the campaign last fall. But a lot of what we saw in this legislative session, you know, it's the same stuff that Republican-controlled state legislatures are doing all across the country. Abortion has long had this kind of a quality to it. But you can also see the same playbook being used in a bunch of other states when it comes to some of the high profile issues that we talked a lot about this session here in Montana.
And Holly, to your point about Democrats rebuilding. To the extent that our politics in Montana do get nationalized in this way, that makes the job of Democrats to rebuild and rebrand in Montana, I think, very difficult. They need to have local and statewide issues, I think, to try to push back and to change the story a little bit. If it's all just a reflection of national politics and the national media culture, that really works to the advantage of Republicans.
Sally Mauk The Legislature's adjournment also means this is our last Capitol Talk. And Holly and Rob, as always, it's been a real pleasure. Thank you so much. And I hope you both have a great summer.
Holly Michels Thanks, Sally.
Rob Saldin Thank you, Sally.
Capitol Talk is MTPR's weekly legislative news and analysis program. MTPR's Sally Mauk is joined by Lee Newspapers State Bureau Chief Holly Michels and UM Political Science Professor and Mansfield Center Fellow Rob Saldin. Tune in during the legislative session on Fridays at 6:44 p.m., via podcast or listen online.