MTPR

Rep. Nancy Ballance Talks Taxes, Budget Projections And Medicaid Expansion

Mar 4, 2019

Rep. Nancy Ballance, a Republican from Hamilton, has served as a chair of the House Appropriations Committee in Montana’s Legislature since 2015. The committee is tasked with building a balanced budget for the state, which is the only legal requirement of the lawmaking body. Ballance is a former insurance executive, and has dug deep into Montana’s finances.

UM Legislative News Reporter Shaylee Ragar spoke with Ballance last week about the state’s revenue projections, the future of Montana’s economy and about her views of Medicaid expansion, which again is a major debate this session.

In 2017, a historically expensive fire season and missed revenue projections led to a state budget crisis. A special session was called, and funding for government agencies was cut. Although state revenues are looking better now, Ballance says legislators are feeling, "gun-shy" about spending state dollars. I asked her if there was a better way to predict how much money the state will bring in.

Nancy Ballance: That’s something that we always challenge ourselves with. I think the modeling that's being done is getting better and better. We have one model that comes from the governor's office. Then we have another model that comes from Legislative Services. But in the end it's the Legislature that decides what they're going to adopt. So, you really have three; and two of them are necessarily political. So the governor's estimate is always political. He either wants to drive more spending or less. The Legislature's estimate is always political. But our fiscal staff are the ones that are supposed to be completely neutral in this. And so I think between those three estimates — there are some who want to have a consensus estimate where we all get together and decide — I kind of like it the way it is, because you get to look at each one and, and then understand what's driving each one and come out where, I think, with a better number.

'17 did take us a little bit by surprise and then we had some things change, like the federal tax cuts that made, made things a little bit more volatile than they normally would be. But I think it wasn't so much missing the revenue estimate as it was maybe just not as quick to see some things as we might have. So I think we need to get better at taking a longer-term view and understand where the economy's changing and where our taxes are changing as a result.

Shaylee Ragar: In your opinion what is the best way for the state to maintain its fiscal health?

Ballance: We have to be clear about what the economic changes are in the state of Montana. And we have to be realistic about where that revenue is going to come from in the future. There are many who say it's going to be a service industry and a tourism industry. And unfortunately if you look at those jobs they are fairly low wage jobs. So if that's the case we're going to have to find a different way to capture the revenue that the state is used to running on.

Ragar: With coal becoming less and less in demand, and that's something that Montana gets such a huge revenue boost from, do you have an idea of how we could maybe make up for that loss?

Ballance: Yeah, well and the trust has built up to almost a billion dollars and there's interest that's used off of that trust, but if you don't have the money flowing in on a regular basis, yeah, it's going to be huge change for the state of Montana. I don't have an answer except to say that we have got to be continuing the work that was started in the interim between the Revenue Committee and the Finance Committee to really get an understanding where the economy's going, and be realistic about it. We have to take our blinders off and say, OK, this is where our economy is going. If the retail industry in Montana is going to be shrinking, we have to find a way to capture some of the income from things like online sales. And I know it's a hard topic to tackle, but we have to be realistic about it.

Ragar: So that would be a sales tax.

Ballance: It would be a sales tax for online sales. Some are trying to do it. 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 an understanding that some of the changes in the way America works and the way the world works, states have to recognize that. That if I can live in Montana and enjoy all the benefits of living in Montana while my job is in California or New York or Pennsylvania — that is a totally different model than what we're used to and we need to figure it out and decide what the state's going to do about it. That's not a short term effort. That's a that's a six to 10 year job that we need to start now.

Ragar: One of the biggest discussions this session is Medicaid expansion with the sunset coming up. And in 2015, you were a no vote, right? So where are you at now with this issue?

Ballance: I was a no vote in '13 and '15 and felt strongly that increasing this entitlement was not something that we should be doing. And part of my issue at that time was I couldn't get a good feel at all for how many people we were talking about. And it appeared to be that it was all adults with no kids, with no disabilities, who were of working age and were somehow choosing not to work or finding themselves in circumstances where they were not working. I've since realized that there are other groups of people that are being affected, helped tremendously by the program. Particularly those with addictions who may have had no place to turn and found themselves in this cycle of addiction with no way to get out, certainly for the Indian population and it's had a big impact on their health outcomes, and shown me things that I didn't know existed. I thought Indian Health Services was a general health service type health care plan for the Native American population, and it is not at all. They cover a very small portion of Indian health. So I think there were a lot of misconceptions and, and a lot that we've seen in terms of good that's come out of the program, and economic good, as well. I can't ignore that for blind ideology. So that's where your ideology kind of clashes with what you see in terms of real benefits for people. And so I think what we need to do is put the limits in that program that make sure it's going to the people who need it. That is also a way to help them get out of that poverty situation which they find themselves, or the addiction situation they find themselves. And I think that, you know, is a benefit to families and does fit very well with the things that I believe in.

Ragar: So that would be the work and community requirements, right? Is that what you're talking about?

Ballance: Yes. The work and community, and also the asset tests. And we we don't have a good feel for how many that is, but we do know that there are some people who have significant assets who are not required to pay into the program. But it's also some premiums. You know, I think people, is not a pure entitlement if you're also asking people to pay a premium.

Ragar: Is there any worry about how the state will pay for work requirements, and you know, testing those things?

Ballance: Oh, I don't think that anybody's looked closely enough into it to say whether or not that's going to have a big impact. But, I think that it makes a good talking point. We always find a way to pay for the things that we need to monitor the programs that are important.