MTPR

What To Know Before The 2019 Montana Legislature Begins

Dec 24, 2018

Budget woes, bonding, bike taxes and bathroom bills. What were Montana lawmakers actually up to in the last legislative session(s)? Get a refresher, and take a look ahead as the 2019 Legislature approaches. Think of it as a 2017 season recap, but for the Montana Legislature.

State Budget

The Legislature’s main responsibility is to craft the state’s budget for the next two years. Early in the 2017 session, lawmakers learned that despite previous projections of surpluses, new estimates expected state revenues to drop by more than $230 million. Crafting the state budget amid these shortfalls dominated most of the debate during the legislative session.

Governor Bullock proposed a budget with new taxes and a small increase to state spending in the next two years. But for the most part, the Republican majority didn’t have much of a stomach for new taxes. The budget eventually passed, but it needed around $97 million in cuts by the summer to make up for revenues continuing to fall off pace of projections.

During the session, Democrats said there were unnecessary cuts in state programs, especially in the health department and higher education, because Republicans weren’t willing to consider the tax increases.

2017 Republican Speaker of the House Austin Knudsen.
Credit Mike Albans / Montana Public Radio

“I think overall, Republicans have a lot to be proud of," Republican Speaker of the House Austin Knudsen said. "We crafted a very austere, tight, budget in a very difficult budget session. We came in here being told we had a $300 million surplus when we showed up and that was not exactly the case. You know that is our constitutional job, craft a budget, craft a good budget, for the state for the next two years."

But backup plan cuts triggered over the summer weren’t enough to balance the budget, and in November, Gov. Bullock called a special session of the Legislature to address a $227 million gap between what the budget called for and how much the revenue projections showed the state actually had to spend.

The cost of a historic fire season in 2017 also pushed the Montana budget off balance.

The Bullock administration again proposed raising some taxes to help get the state’s finances back on track, but the Republican majority in the Legislature shot that down.

They ended up covering the budget gap by doing three main things: enacting another $75 million in cuts to state agencies; moving some money around between agencies, which took care of about $94 million; and adding fees on the state workers compensation investment fund, good for about $30 million. And in a move opposed by Democrats, the Legislature agreed to negotiate a new lease with the state’s only private prison in Shelby, which would provide around $30 million.

After negotiations between Bullock's office and the prison company broke down, the governor rejected the agreement, his office saying the state could get by without the $30 million.

Fast forward to July 2018: Bullock announced that the two parties had reached a deal that would result in Montana getting $34 million in exchange for a two-year prison contract extension, along with other provisions. The $34 million is money the state pre-paid towards a future potential purchase of the prison. Bullock says pressures to the state budget were not the reason for the deal with prison company CoreCivic.

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Budget Restorations

In July 2018, with the state’s revenue picture looking up, Gov. Bullock announced that some of the big budget cuts from the previous two sessions would be restored.

“As we close the fiscal year we find that we’ll have the ability to put about $45 million to restore some of the cuts that occurred,” Bullock said.

Montana Governor Steve Bullock and Lieutenant Governor Mike Cooney talk with reporters in the Capitol about restoring funding for some state budget cuts, July 25, 2018.
Credit Corin Cates-Carney / Montana Public Radio

Most of the restorations in the governor's proposal — just over $30 million — went to the Department of Public Health and Human Services, which saw $49 million in cuts in 2017. And while health care advocates and workers cheered those restorations, they also said that long term damage had already been done.

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Infrastructure Bill

The other big news from the 2017 session was the Legislature’s failure to reach an agreement with the governor on an infrastructure bonding bill for the third session in a row. That bill would have spent about $80 million to fund maintenance projects at schools and highways, and launched construction of a state veterans home that the federal government is expected to pay for later. It also included another public works package to fund rural water projects. But the session ended with Republicans and Democrats pointing figures across the aisle, saying each other's political tactics killed a potential compromise.

Conservative Republicans criticized the infrastructure package as dangerous, because it puts the state into bond debt at a time when revenues are down.

Other Republicans were on board with using debt to pay for long-term infrastructure. But they objected to the bill because they say it would fund non-essential projects like the renovation of Romney Hall at Montana State University.

Montana's 2018 infrastructure report card from the American Society of Civil Engineers.
Credit American Society of Civil Engineers

Butte Democrat Jim Keane argued bonding is what allows the state to invest in the future.

"We’re serving in a building that was paid for by bonding. We’re the benefits of those who came before us. You would think the people here would want to do the same thing," Keane said. 

Before the 2017 session began, Democratic Governor Steve Bullock named infrastructure a top priority for his administration. In a written statement released near the end of the session, Bullock said he, "worked across the aisle and met with the Republican-majority Legislature more than halfway." But in the end, the governor and the Republican majority were not able to strike a deal.

In May, after the regular session ended there was talk of convening a special session focused on passing an infrastructure bonding bill. But Republican leaders rejected the idea, seeing little chance for an agreement.

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Bipartisan Agreement

Both Republicans and Democrats praised work done in the 2017 session to reform the state’s justice system, in what Minority Leader Jenny Eck called the most comprehensive reform of the system in a generation.

“That’s about a dozen bills that make our system smarter and more just, saving money and giving our judges and prosecutors more tools to give defendants the right sentences and help reduce recidivism and make sure we use the prison system for the people that need to be there the most,” she said.

Lawmakers also joined together in a bipartisan effort to reform the state’s child protection system as the state deals with rising caseloads of child abuse and neglect.

The Sensational

Bike Tax

A legislative proposal to slap a $25 tax on out-of-state bicyclists visiting Montana received a lot of negative buzz in state and across the country. It started when, while speaking on a different bill, Sen. Scott Sales called cyclists the “most self-centered, rude people navigating on the highways, or on the county roads that I’ve seen.”

Sales took some heat for those statements, and in response, proposed the bike tax.

Sales said he introduced the proposal, “In jest to some degree, and just to poke them in the eye from some of those folks I’ve heard from out of state, I slapped that amendment on there. I had no idea whether it would pass. I didn’t even lobby for it.”

The proposal crashed and burned.

A legislative proposal by Senate President Scott Sales to slap a $25 tax on out-of-state bicyclists visiting Montana turns out to be a big joke, but it's going over like a lead balloon.
Credit Corin-Cates-Carney

“Sharia Law”

A bill to ban foreign laws in Montana, sometimes referred to as the “Sharia law” bill, was approved by the Republican controlled House Judiciary Committee on an 11-to-8 party-line vote.

The bill’s sponsor, Senator Keith Regier, said his intent was to protect the fundamental liberties of all Americans by banning foreign laws from being used in state courts.

Democrats argued the bill was unnecessary and that it could negatively impact tribal members because they are citizens of their tribe, the state, and the U.S.

The bill failed to advance in the Senate.

“Bathroom bill”

Lawmakers voted down a bill that called for a statewide vote on whether to bar transgender people from using bathrooms and locker rooms that don't match their gender at birth. The House Judiciary Committee voted 11-7 against the bill

Legislators who opposed the bill warned it would lead to humiliation and increased safety risks for transgender people.

"It’s crazy,” said Democratic Representative Jenny Eck from Helena. “It’s crazy to think about this, about having people standing by the bathroom, checking documents. Is that how we want to live? I don’t think small business owners want to be responsible for this kind of thing. Why would we do this? If there’s indecent exposure happening in this state there’s already a law that covers it. There’s already laws that cover the things that we’re afraid of."

Supporters of the measure, including the bill’s sponsor Republican Representative Carl Glimm of Kyla, said it’s aim was to protect young people.

Unresolved issues heading into 2019

Montana Legislature balance of power, 2019 vs 2017.
Credit Timothy Pierce, Community News Service, UM School of Journalism

Heading into the 2019 session, Republicans will maintain control of both houses, with the Senate split 30-20 and the House 58-42 in favor of Republicans. That means Democrats won’t have the 60 votes necessary to “blast” bills out of House committees to be voted on by the full house.

However, proposed rule changes for “blast” motions will be debated in the early days of the 2019 session and could result in a partnership between Democrats and moderate Republicans, weakening the conservative Republican leadership in the House.

John Adams of the Montana Free Press takes a closer look at the longstanding feud between moderate and conservative Republicans in the state Legislature here.

Medicaid Expansion

In 2019 the future of Medicaid expansion in Montana will be the big debate between the Republican majority and Democratic Governor Steve Bullock.

Medicaid expansion narrowly passed in 2015. Then, moderate Republicans joined Democrats and Governor Bullock to extend health coverage to people with incomes below about $16,000 a year. Nearly 100,000 Montanans now have that coverage. But it will go away in June if lawmakers don’t re-authorize it this year.

Montana voters in November rejected ballot initiative 185, which would have made Medicaid expansion permanent, funding it with a new tobacco tax. I-185 was the single most expensive ballot initiative in Montana history, with tobacco companies pouring more than $17 million into Montana this election season to defeat Initiative-185

I-185 would have tacked an additional $2 per-pack tax on cigarettes. It would have also taxed other tobacco products, including electronic cigarettes, which are currently not taxed in Montana. Part of that $74 million in tax revenue would have funded continuation of Medicaid expansion in Montana. In September, Governor Bullock told the Montana Association of Counties that the failure of I-185 could lead to budget problems in 2019.

“If I-185 fails to pass the ballot initiative, we’re going to be in for a tough [2019 legislative] session. Because if you thought cuts from last special session were difficult, I think you should brace, unfortunately, for even more,” Bullock said.

Hamilton Republican Nancy Ballance chairs the Legislative Finance Committee
Credit Corin Cates-Carney / Montana Public Radio

Republican State Representative Nancy Ballance opposed 185, but was not on the tobacco companies’ payroll. She disagrees with Bullock’s position.

“I think one of the mistakes that was made continually with I-185 was the belief that there were only two options: if it failed, Medicaid expansion would go away; if it passed, Medicaid expansion would continue forever as it was,” Ballance said. 

Ballance says Medicaid expansion can be tweaked without resorting to such a sweeping new tax on tobacco products.

What kind of tweaks? According to newly elected House Speaker Greg Hertz, a Polson Republican, “We’ll be looking at work requirements, asset testing and possibly some other restrictions too on Medicaid expansion participants.”

Funding the state’s growing expenses for Medicaid expansion — the governor’s top priority for the 2019 session — will be a challenge for lawmakers, with the state health department still dealing with big budget cuts from the 2017 regular and special sessions.

Bullock says continuing expanded Medicaid is not only important for the people it now covers, but also for the state’s hospitals that now give away less care for free.

“It threw a lifeline to our rural communities," Bullock said. "Rural hospitals in states that did not expand Medicaid have been closing six-times faster than those that did. In Montana, since we expanded Medicaid we haven't lost one hospital in our entire state.”

But many Republicans aren’t so enthusiastic.

“I don't think it's a foregone conclusion to say that Medicaid expansion is going to pass in any certain form — or pass at all. I think that that is still up for debate,” Senate President Scott Sales said.

Polson Republican State Representative Greg Hertz.
Credit Corin Cates-Carney / Montana Public Radio

House Speaker Greg Hertz issued this warning about the budget: “If [Gov. Bullock] expects to fund that budget with tax increases, that’s going to be a difficult and non-starter getting that through the Republican Legislature.”

Legislative analysts say the state can afford to pay for Medicaid expansion.

Hertz says Republican goals for 2019 are simple: pass a balanced budget and to do so with little or no tax increases. He says it's likely for the chambers to once again debate an infrastructure bonding package for the state.

Infrastructure will again loom large at the Legislature, after the failure of big public works bills over last three regular sessions. Lawmakers couldn’t agree on what kind of projects should receive funding or whether the state should use cash or debt to pay for them.

Heading into the 2019 legislative session all sides are more-or-less in agreement about how much there is to spend, although they’re not likely to find so much common ground on how to spend it.

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You can stay up to date on 2019 Montana Legislature news on your radio and online with MTPR. Get a weekly roundup on “Capitol Talk” each Friday.

Track bills and contact your lawmakers at the Montana Legislature website.