The gavel banged down shortly after 1 o’clock this morning to bring the special legislative session to a close after lawmakers passed a series of bills to address Montana's projected $227 million budget shortfall.
Lawmakers reported to the Capitol Monday to begin hearings. But Governor Steve Bullock's call started the special session Tuesday. Their task was to address a deficit caused because revenue is not keeping pace with spending. The projections show there would not be enough money to pay the state's bills, including for the worst wildfire season in Montana's history.
At the conclusion of the special session, Republican Speaker of the House Austin Knudsen called the legislature's work a win for the conservative majority.
“The Republican caucus was committed to not raising taxes on hard working Montanans, and that’s what we’ve done here today," he says. "We’ve stayed united and strong as a Republican caucus and frankly we’ve given the governor all the tools he needs now to fix this crisis that he says he has.”
Democrats and the governor expressed disappointment in written statements afterwards, but put on good face for the special session’s outcome.
The governor proposed a basic framework heading into the special session - $75 million in cuts, $75 million in fund transfers, and another $75 million in temporary tax increases.
From the start of the session the Republican caucus rejected tax increases. Instead they dug harder at finding additional pockets of money in government and pressured the governor to expand the contract for inmates housed in the state’s only private prison.
House Bill 2 was the foundation to address the budget shortfall. Lawmakers codified Governor Steve Bullock’s propose cuts. The governor finalized those cuts on the first day of the special session. The groundwork laying bill put these cuts into statute, meaning they would be permanent for the next year and a half, unless certain conditions were met.
The Republican majority rejected the Governor’s proposed temporary tax hikes on rental cars and hotel rooms.
To make up for that lost revenue, GOP leaders set out to identify additional fund transfers across state agency budgets. House Appropriations Chair Nancy Ballance is pleased lawmakers and legislative staff found more money than the $76 million in transfers than was originally proposed by the Governor.
"So getting that up to $94 million is huge because that’s $20 million more than we expected or $20 million more that would have had to come out of cuts," she says. The alternative would have been, "Some kind of tax increase which we would have been opposed to all along."
House Bill 6, the transfer bill, overwhelmingly passed both the House and Senate.
Another source of revenue lawmakers tapped, at the request of the governor, was a temporary fee for the state to manage Workers Compensation. The 3 percent fee would be assessed on Montana State Fund assets above $1 billion. It would raise an estimated $30 million. In the end Senate Bill 4 was approved on party line votes.
The most contentious bill in the package included a provision that strong-armed the Governor to accept an offer from the operators of the private prison in Shelby. Before the start of the special session, CoreCivic offered $30 million to help offset the state’s budget shortfall. The catch? The company would get a 10 year contract extension to operate the prison, despite objections from Democrats.
Billings Representative Kelly McCarthy said the state has no business sending its inmates to a for profit prison whose owner has faced allegations of human rights abuses.
“We have a carefully crafted web of legislation now that is meant to force us to accepting something that is really morally reprehensible to number of people on this side of the aisle," he says.
Republicans cleverly crafted the bills where if the governor vetoes all or parts of the language he threatens to blow up the entire package, which would leave him with no option but to make $227 million in cuts.
These bills and others, now head to Bullock’s desk for consideration.