MTPR

'Capitol Talk': Health Department Cuts; Sexual Harassment; And Talk Of A Sales Tax

Mar 8, 2019

Tonight on Capitol Talk: The state health department faces permanent job cuts; A sales tax proposal reappears at the Capitol; Sexual harassment allegations among lawmakers lead to a new anti-harassment policy; And with time running short, Gov. Bullock remains coy about his 2020 election plans.

Sally Mauk: Welcome to Capitol Talk, our weekly legislative analysis program. I'm Sally Mauk and I'm joined by Lee Newspapers Capitol Reporter Holly Michels and University of Montana Political Science Professor and Mansfield Center Fellow Rob Saldin.

And Rob, several more potential candidates for president this week announced they are or are not going to run for that office. But Montana's Governor Steve Bullock was not one of them. He remains coy about his plans. Meanwhile some national media including The New York Times did stories recently that Bullock is being pressured by Senator Chuck Schumer and others to choose instead to run for the Senate against Republican Steve Daines. And they're also reporting that Bullock has ruled that out so far.

Rob Saldin: Exactly Sally. Schumer is the minority leader and he'd very much like to be majority leader in the next Congress. We've discussed this whole dynamic previously, but I think it boils down to three basic points. First his chances of getting the Democratic presidential nomination are very bad. Second his chances of defeating Steve Daines in the Senate campaign are very good. Probably something in the neighborhood of 50/50 which is as good as it's going to get for a challenger taking on an incumbent senator. And third there's just no other Democrat in Montana who appears to be in a position to give Daines a run for his money. Bullock is by far the best positioned candidate. It's not even close. Of course Schumer recognizes this. He wants the Democrats to retake control of the Senate, and Bullock would be a huge recruit for him in that effort if Bullock ran for the Senate. You'd take what otherwise would be a safe Republican seat and instantly transform it into a toss-up. And that's good for Schumer not just because Bullock would have a real chance of winning, but also because win or lose. At the very least it would force Republicans to devote a lot of resources to defending Daines and that seat for the GOP. But Bullock, you're right Sally, sure looks like it's full steam ahead o n this presidential. He was just back in Iowa this week. He's continuing to staff up and his team, as you suggest, they keep insisting he has no interest whatsoever in running for the Senate. If he waits to announce what he's going to do until the end of the legislative session — which he has said he's going to wait till then — that's the end of April and there will be a lot of candidates in the race already raising money and gearing up their campaigns.

Mauk: Would he be too far behind the eight ball then?

Saldin: Maybe so. The timing here is really tough for him and we're starting to see that lane that he would be in start to fill up. Colorado Gov. John Hickenlooper announced this week. He has a very, very similar portfolio; presumably would appeal to a similar type of Democrat. Joe Biden: All indications are that he is going to announce here in the next couple weeks. Again, lots of overlap there between Bullock and Biden in terms of the type of appeal that they would be making. But you know, all that said, the reality is is that Bullock is governor and he's in the middle of a legislative session. If he announces for president before that session is over it could be a real distraction. Certainly it would invite some blowback from Republicans, and I think some Democrats would feel like he's kind of left them hanging and not really given his all to what he's doing.

Mauk: What happens if he does enter the presidential race and then soon thereafter realizes he might rather run for the Senate, because as you say, it's a better shot? Is there a timeline for getting into the Senate race that would be too late.

Saldin: Yeah. So this is one of the interesting little wrinkles in thinking through this. It might be possible for him to do both. That is, to announce for the presidency, go through the early states, Iowa, New Hampshire, even all the way through Super Tuesday. If lightning strikes and he's a serious contender, you know, great. Forge ahead. But assuming it doesn't work out he could drop the presidential bid and still run for Senate because Montana's primary is very late in the cycle. So our filing deadline for a Senate run isn't until mid-March. So yeah it's technically possible to take a shot at the presidency and still file for the Senate seat. Now there are downsides to that. The Montana Democratic Party for instance would obviously prefer to know what Bullock's doing a lot earlier. But given their short bench of candidates they may not be in a position to dictate terms on this one.

Mauk: It worked for Marco Rubio in Florida to do that very thing.

Saldin: Sure. Yeah, yeah we've seen it from plenty of other people over the years.

Mauk: Holly, back to Helena. All lawmakers won't be back from their mid-session break until Monday. But the House Appropriations Committee has begun working on the state budget this week, and the committee is considering permanently cutting 100 positions in the state health department; jobs that have been vacant for a while as a way to fund other services. But the head of that department and the governor's budget director, Tom Livers thinks that's too drastic a hit.

"It guarantees longer wait times, lack of local service providers, slower processing across state government," Livers said.

Mauk: They may lose the argument, Holly, in this Republican dominated committee.

Holly Michels: So, what the department is saying here is that cutting these positions would solidify low staffing levels they have been struggling with for the last couple of years. During budget cuts we saw in 2017 a lot of agencies across state government left jobs open to reduce spending. That led to things like closures of offices of public assistance around the state, field offices for the Department of Revenue, less staff like Livers is saying led to longer wait times for people trying to get services. But that cut does save about $8.8 million within the Health Department. And that will be spent other places on the Children's Health Insurance Program and raising the rates that providers are reimbursed for providing services to people with disabilities and the elderly.

In Thursday's hearing, lawmakers were pretty frustrated because they said it was the first time they'd heard from the department about their objections to cutting the funding for these positions. So we'll see if anything changes with the budget based on those objections in the next couple days. We're expecting to have votes in the Appropriations Committee on Monday and then the budget will hit the House floor sometime in mid-March.

Overall, this budget that lawmakers have shaped is about $32 million less than what the governor's proposed in terms of general fund spending. It's a fairly small amount in terms of difference, it's less than a percentage point, but there are some pretty big differences. The governor's preschool proposal money isn't in there. And then there's, of course, the big elephant in the room of Medicaid expansion. It's about $60 million over the budget. And there are some savings to this state, but that's still not a part of the picture at this point and will need to be incorporated.

Mauk: Governor Bullock, Holly, believes some tax increases are going to be necessary to avoid the need for a possible special session down the road to cover government expenses.

"We've got to fund the government that folks expect, and we got to leave money in the bank at the end to ensure that they're not coming back as soon as we sent them home," Bullock said.

Mauk: And Holly, he's warning against a repeat of what happened in 2017.

Michels: Yep. Bullock has made clear that he wants to leave about $300 million in the bank. We did see in 2017 when revenues came in lower than expected, it's pretty easy to burn through cash reserves, especially when you look at, you know, we had the most expensive fire season in state history that year. Bullock has about $100 million in new revenue proposals. That's things like increasing the taxes on accommodations, rental cars, alcohol, tobacco, and the fees that are charged some investors. Republicans are saying this session, as they have in years past, that those proposals are dead on arrival. We haven't actually seen those bills move through this session yet but Republicans are pretty clear that they don't have the appetite for them.

Mauk: Rob as Holly just said, the Republican leadership isn't nearly as concerned as the governor that the state could come up short again. They're way more optimistic about that.

Saldin: Yeah, I think way more optimistic, but also they just have a fundamentally different perspective. From their perspective the number one objective is to really hold the line on spending. And so they're just going to be ideologically more comfortable with hoping for the best. And if you fall up short then maybe you have to come back and try to fix it, but better to err in that direction than to hide away a bunch of money in case of the worst, right. You want to air on the side of less government, less spending, keeping taxes low.

Mauk: But Holly, while the Republican leadership opposes any new taxes or tax increases, there are some Republicans like Nancy Ballance of Hamilton who are more open to the idea as Montana's economy changes. And Ballance, for example, is open to putting a sales tax on online sales.

"We've talked about it, we've talked around the edges of it, but we haven't gotten serious enough yet about really studying it and understanding that some of the changes in the way America works and the way the world works. States have to recognize that," Ballance says.

Mauk: An online sales tax is not likely this session Holly, but it's interesting to note the argument coming from a Republican.

Michels: Yeah, this is something lawmakers have been dancing around, ideas like this for a while now. Discussion is that Montana's revenue structure really hasn't changed to fit the new economy we're in now which is a lot more online, less more about bricks and mortar Main Street businesses, and also less revenue coming from oil gas and coal. Common example we hear a lot up here is that we knew how to tax a video rental store like Hastings really well, but don't know how to tax Netflix.

We've seen other Republicans talk about this idea. After the 2017 session ended, now Representative Llew Jones and former Representative Rob Cook, both Republicans, traveled around the state making a pitch for a general sales tax to local groups saying that the state's tax structure needed to adapt. There's also been an interim legislative committee that's looked at this, but they only held a couple meetings and didn't actually forward recommendations to the full Legislature.

Another thing we've heard during this session is from local groups who point out that as the state isn't adapting, a lot of that tax burden is being passed on to local property tax payers. Ballance is part of a group of Republicans who are a little more moderate called the solutions caucus. And like you said, they're supportive of ideas like this, though they might not go anywhere this session.

There's also those more conservative lawmakers who have voiced support for a broad statewide sales tax that includes legislators like Senate President Scott Sales, Republican from Bozeman. Balance does have a pretty fair amount of sway in the Legislature. She's been chair of the House Appropriations Committee for several sessions, though this year she did lose out in a bid to be speaker of the House to Republican Greg Hertz, and is now a co-chair of that Appropriations Committee, so does have some power but maybe a little bit less this session than in previous sessions.

Saldin: The sales tax is an interesting issue, I think, in addition to what Holly said, you can also look at it as one of these kind of third rail issues, right. It's a great thing to be able to accuse your opponent of supporting a sales tax, and so a lot of people who on policy grounds might be open to a sales tax are reluctant to touch it because it's much harder to explain the rationale for a sales tax than it is to just issue an attack on your opponent for supporting it. And so a lot of what we've seen in the past is actually Democrats who have been more opposed to the sales tax, right? Kind of flipping the traditional narrative that Republicans are anti-tax. Well it's often been the Democrats who've used the sales tax as a political weapon. Certainly Steve Bullock did that against Rick Hill and Greg Gianforte in those runs for governor.

And the argument the Democrats have often made is that, well, the sales tax is a regressive thing, it hits the poor the hardest. There are answers to that. You can kind of carve out a space for say, groceries, to be exempt from the sales tax and things like that. But the politics of it are just a lot tougher and they definitely lean in favor of people who want to score political points by attacking the whole concept of a sales tax.

Mauk: Finally Holly, Democratic Representative Jonathan Windy Boy fired back this week that he's basically been unfairly accused of sexually harassing a colleague, a female legislator, in 2017. But past and present legislative leaders have backed-up the allegation, including a neutral investigator.

Mauk: Representative Windy Boy who's a Democrat from Box Elder was identified last month in a report by The Associated Press as the subject of a verified report, complaint of sexual harassment in 2017. Windy Boy was identified by former Speaker of the House Austin Knudsen. The report that the AP wrote about was done by a Great Falls attorney, so an independent investigator outside of the Legislature who confirmed what Windy Boy did was harassment, saying it was subtle but evident and that lawmakers needed to take action. In 2018, Windy Boy resigned as the chair of the State Tribal Relations Committee, but when he resigned he cited work commitments as the reason why.

What happened with Windy Boy is what pushed lawmakers to complete work on a sexual harassment policy that they adopted at the start of this session. That policy outlines what happens in the case of an incident of harassment; where a report should be made and how it should be investigated. Lawmakers also had a training at the start of this session. There was a lot of debate in putting that policy together about how to handle complaints with all the different types of people who were at the Capitol during the session, like media lobbyists and the public who don't work for the state as lawmakers do but still interact in the same space. But we do have this in place now and lawmakers, legislative leadership so far this session is saying that what it's done is brought a lot more awareness to the issue.

Mauk: You've been listening to Capitol Talk our weekly legislative analysis program. I'm Sally Mauk and I've been speaking with Lee Newspapers Capitol Reporter Holly Michels and University of Montana Political Science Professor And Mansfield Center Fellow Rob Saldin. Holly and Rob, the session reconvenes next week officially and we will have a lot to talk about then.