The 2025 Montana Legislature elected by voters in November will meet in January to consider new laws and develop a two-year state budget. Already, it’s clear what some of the key issues of the session will be — among them housing affordability, tax policy, education funding and the potential renewal of Montana’s expanded Medicaid health coverage program. The Session podcast team took some time at the inaugural Montana Free Press Fest, held in Missoula Sept. 6-8, to sit down and discuss what we can see about next year’s legislative session from here in front of a live audience.
Austin Amestoy We are still four months from the opening gavel of the 69th Montana legislature. But as the 2024 election nears, the stage is already set for some major policy debates. Housing, property tax, health care, education funding, will cover it all. On a special live recording of the session, a look at the policy and politics inside the Montana state house were before a live audience in the U.C. theater at the University of Montana for the 2024 Free Press fest. I'm Austin Amestoy and I host Morning Edition at Montana Public Radio. And I'll be your host today on the show as well. Let's go ahead and meet the panel.
Eric Dietrich I'm Eric Dietrich. I cover housing, the economy and public finances for Montana Free Press.
Aaron Bolton I'm Aaron Bolton. I cover health care for Montana Public Radio.
Jackie Coffin And I'm Jackie Coffin. And I'm the news director for Yellowstone Public Radio.
Austin Amestoy Let's start by saying there is still a whole bunch that is unclear about the 69th Montana Legislature, which will convene in January. We don't know the specific bills that may come forward or which policies or subjects will dominate the conversation, though we will make some reported guesses on the show today. We also don't know what the partisan makeup of the legislature will look like, but we'll start there today. Jackie, Republicans held a supermajority in the state house in 2023. This year, though, the electoral landscape looks different in Montana following redistricting. So how might this new district map impact party control of the state House next year?
Jackie Coffin Yeah. Austin So we're going to touch on the maps first, a little bit. And they're redrawn every ten years. The legislative maps are to reflect changing population data and census data in Montana. So for the new maps, what these districts look like, so they are kind of pinwheel shaped. So they combine urban districts that are heavily Democrat. And then they take sort of a slice out of suburban areas that are more typically conservative for voters. So what that will do with those in play for the 2024 elections is both Democrat and Republican legislators agree that that will help elect more Democrats or likely give more seats to Democrats in both the House and the Senate. So maybe 8 to 10 seats that the Democrats can pick up in the House and 3 or 4 in the Senate, though that remains to be seen, of course. And it's unlikely that the Democrats will then win a majority in either of those chambers in the House or the Senate. But it will mean that they can chip away at the Republican supermajority that the legislature saw in the 2023 session.
Austin Amestoy Right. And if legislative Republicans lose their supermajority in 2025, is there any indication how that could impact the policies that succeed or fail next year?
Jackie Coffin And so I think that goes beyond just the Democrats picking up seats and goes to the makeup of the Republican Party itself in the legislature. What policies will pass also depends on Republicans working together in the next legislative session.
Austin Amestoy I want to move into another major policy debate that we are fairly confident we're going to see come January. That's housing affordability, of course, top of mind for many Montanans. Governor Greg Gianforte established a task force to recommend policies before last year's legislative session, and the task force helped produce bills that aimed to make it easier to build. For example, making it harder for cities to say where property owners can and can't add an accessory dwelling unit on their property. And the governor kept the task force around to produce another round of recommendations for next year, which came out quite recently. So, Eric, let's talk about those new recommendations. What are some highlights?
Eric Dietrich Yes, but briefly, probably also note that the governor is, in fact, up for reelection as well.
Austin Amestoy That's very true.
Eric Dietrich And if his Democratic challenger Ryan Busse wins, that would also change the dynamics in the state House in a relatively profound way because, of course, the governor has veto power. But anyway, back to housing affordability kind of for context there. There's kind of really two main schools of thought that get talked about in the legislature in terms of housing affordability, which is widely seen as one of the state's most significant issues right now. The first is the idea that you could maybe put public dollars into helping build housing that's rented out at below market rates. So you hear about like, you know, low income housing tax credits or Section 8 housing, that sort of stuff. That that's one approach. Those sorts of projects are expensive. They're also a hard sell politically for fiscally conservative Republicans who are the folks that run things in our capital most years. And the other approach is more of a regulatory reform approach, and that's doing things that make it easier to build new housing. The idea is that adding supply to the market there will kind of change the negotiating power away from landlords and people selling homes and maybe keep prices steady or maybe even see price reductions as a result. The last round of housing task force stuff, the idea was to try to make it easier to build. So they do things like they kind of they passed some laws that kind of rework local government zoning powers to make it harder for local officials at the city level to kind of say, no, we don't really want that sort of thing here. So we could see more of that next time. There are ideas being floated. Some of the low hanging fruit is probably been passed already, but we could see ideas like that as well.
Austin Amestoy We'll keep with you here, Eric, as we move on to another fairly wonky subject, but no less important.
Eric Dietrich Wackier than housing?
Austin Amestoy Yeah, well, actually, it might be. Property taxes. Many homeowners in Montana, of course, saw a substantial spike on their bills last year.
Eric Dietrich Yeah, and many, many homeowners are not happy about it. And that's translating into political or at least perceived political will to do something about it. We're hearing from people in both parties, they would like to reduce residential property taxes at next year's legislature. The challenge, of course, is that the money that those taxes collect needs to be collected somewhere. Right? You know, at least unless you want to lay off cops and teachers, which nobody is saying they want to do at this point. There is a little bit of a kind of space between the parties in terms of what they want to do. Generally speaking, in a very broad brush sense, Democrats think the right way to deal with the property tax stuff is to shift more burden on to businesses. They tend to think that there's a lot of like wealth and businesses that those folks can afford to pay more, especially larger businesses. Republicans tend to worry about putting too much burden on businesses and hurting the economy, and generally they want to look elsewhere. Of course, a complicating factor, right? If you think about residential versus commercial, Yellowstone Club mansions are residential. And small, like Main Street coffee shops are commercial, Right? And so if you increase taxes on commercial and lower them a lot of them on a residential. Right, you're cutting taxes for the Yellowstone Club and raising them on the local coffee shop down the street. And that is a fascinating challenge. That's appropriate. Maybe it's not. I'm not a politician, so I don't have to decide.
Austin Amestoy And of course, affordable housing wasn't the only issue that actually prompted a task force from Governor Gianforte this year. The property tax task force also met and delivered some proposals recently. So what are some highlights from those suggestions?
Eric Dietrich The big proposal out of the task force and the one that will probably get the most coverage that you see coming up a legislature will be what they're calling a homestead exemption. And that basically would kind of take the residential bucket of properties and divide it into primary homes and non primary homes, like second homes of vacation rentals. And the proposal would be to raise taxes on second homes and vacation rentals in order to lower them on primary residences. The Governor has kind of expressed support for that idea in concept, but has not expressed support that I've heard in an explicit way for particular details. And of course, the details of that proposal will be hammered out at the legislature. So what will be fun to watch?
Austin Amestoy It sounds like this session, maybe even more than others, will be a policy wonks dream.
Eric Dietrich I mean, they'll be arguing about social issue stuff, too..
Austin Amestoy Well, let's pivot to health care now. We'll turn to Aaron for this topic, who's been tracking a major debate on Medicaid expansion. Sound familiar? Teed up for this next legislative session. So let's start with an overview. Aarobn. Tell us about what exactly Medicaid expansion is.
Aaron Bolton Yeah, for anyone unfamiliar, Medicaid expansion is a separate part of the Medicaid program that essentially is for folks that historically made too much to be on traditional Medicaid but were unable to afford health insurance out there on the open market. And, you know, at least from the count that I looked at last, the program covers a little over 98,000 Montana adults and children. Those programs are separated. So chip for kids and then just Medicaid expansion for those adults. But yeah, legislators, next session, they will be talking about renewing that program. They last did it in 2019. And so, yeah, it'll be an interesting discussion about whether lawmakers are into renewing this program or whether different parts of the party want different things tied to that renewal. So, yeah, we'll see what that discussion looks like next year.
Austin Amestoy Yeah. When we don't have a crystal ball to look ahead. But of course we can look back to 2019, the last major fight there. Tell us a little bit about that, Aaron. What did we see and what might that do to inform what will happen here in January?
Aaron Bolton Yeah, I'm I don't like crystal ball predictions, so I'm not going to make one of those. But looking back at there was a big fight over work requirements in the Medicaid program at the time under the Trump administration. They had paved the way for work requirements for folks on the Medicaid expansion program. And so Republicans went ahead and put that into the renewal. They tied it to it. Democrats weren't very happy about that. But in order to get the program renewed, they did have to go along with that. Those work requirements were never ultimately actually put in place because the federal government didn't actually approve them. So, yeah, it'll be interesting to see if that comes up again as well.
Austin Amestoy Right. But Republicans were generally on board with the idea of re-upping Medicaid expansion in 2019?
Aaron Bolton A good chunk of them were in the House. 20 Republicans voted in favor of the bill. And all Democrats, like I mentioned just a second ago, supported it, despite not liking those those work requirements as it was the only path forward to get that program renewed and keep those folks covered. Things were tighter in the Senate, and that's where a lot of the back and forth happened.
Eric Dietrich It took them a few votes and they only got it by a vote or two. Right. I think and that's kind of to Jackie's point about watching legislative elections. Right. That's a place where it will matter.
Aaron Bolton Yeah, it could certainly be a narrow, narrow path to get it through the Senate, depending on who gets into those seats. But it is worth noting that right now the state health department and the Gianforte administration are doing a big rebuild of the state's mental health and behavioral health systems, and the known as the 872 Commission, where they have $300 million to pay for a lot of these things. And a lot of that funding is just to get some of these programs off the ground and also for some ongoing funding. But going into the future, those programs are going to heavily rely on Medicaid funding. That is where the bulk of that funding is going to come from. So in order to keep those going, there's a lot of incentive to keep Medicaid expansion around to make sure that those coverage numbers are high enough that people can actually access these mental and behavioral health programs.
Austin Amestoy And before we leave the topic, I did want to ask one more question about the implications more broadly of Medicaid expansion beyond just the people who are enrolled in the program. What are those implications look like in Montana and like, what are we talking about right now?
Aaron Bolton Yeah. Montana has been in expansion state for ten years, so it's been around for some time. At this point in when it came into being, it cut our uninsured rate, the people without health care insurance in half. And it's been hovering around 8% ever since we expanded Medicaid. So it has made a really, really big impact. And having more people insured means more revenue for our hospitals, especially those critical access hospitals. The Montana Health Care Foundation estimates that uncompensated care rates, meaning that folks that are uninsured and can't pay those bills, the hospitals generally foot that through their community care obligations. That was reduced by 59%. So that's huge. It's estimated to be about $15 million that hospitals are now getting paid for that they would otherwise be covering themselves.
Austin Amestoy Well, hey, let's shift back to Eric now to talk a little bit about education policy in Montana. Some of Montana's largest school districts have cut dozens of teaching positions this year to balance their budgets. And some administrators have been calling on the legislature for an increase in funding. So, Eric, we have to set the stage a little bit for this discussion. Can you give us some background on how schools are funded in Montana?
Eric Dietrich The key element is really that there's a per student funding amount, for every student that's included in each district's enrollment count. They get a certain amount of money and that's like the biggest piece of their budget usually. And that kind of determines how much the schools have to spend on teachers and textbooks and all the other expenses it takes to educate kids. That amount and the formula overall is set by the legislature. Historically, the per student piece of the funding formula has been increased at 3% a year to account for the effects of inflation. Inflation is anybody who follows the economy or anybody who buys things knows has been much more than 3%. And that's really put a squeeze on schools. School administrators are, you know, really saying that that's hurting them. It's hurting the ability to keep teacher pay in line with cost of living, hurting the ability to do all sorts of things. And they would really like the legislature to increase that per student amount more to align that.
Austin Amestoy This isn't the first session they've wanted of that.
Eric Dietrich I mean those want that. Yeah I mean there are always arguments about that. Like should the state have more funding in the schools? Is the state putting enough money in the schools? But I think it's for sure coming to a head in a way that's unique.
Austin Amestoy Right. Well, like you've been saying, Eric, the pressure has really reached, I think, a pinnacle this session. So is it likely that the inflationary amount may actually be increased this next session?
Eric Dietrich You know, money stuff is always hard to protect at the legislature. And the challenges, of course, is that money has to come from somewhere. It has to come from property taxes or income taxes like the two primary ways we pay for government programs in the state. And Republicans on Capitol also, as we talked about, would like to reduce property taxes on homeowners. They'd also like to continue to cut income tax rates. But, you know, the state is running a surplus right now. There is some money to work with. One of the things we heard here at that Free Press Fest yesterday was David Bedey, a Republican, who's one of the key players in education policy. And he said at a panel yesterday that he wants to put more money into the funding formula to help schools match inflation. The number I heard yesterday was about 50 to 75 million, perhaps tentatively, depending on all sorts of things. But that would be a substantial injection of cash. Most school administrators probably tell you that's not enough, but that would be extra money for the school funding formula. There's also talk of bills that would increase teacher starting pay, which has been a perennial issue for Montana, and perhaps also explore some sort of housing stipend for teachers. We hear a lot of stories about teachers who are maybe hired into rural districts or even urban districts, and then start to look around and realize how much housing is going to cost and turn down jobs or who leave positions. You know, after a couple of years, they realize they're not going be able to be able to buy a house and raise a family in the community where they're trying to work. And those bills would perhaps be ways to address that.
Austin Amestoy Well, we'll bookend our conversation today with Jackie and more election topics here. We really wanted to make sure we touched on the constitutional amendments that are on the ballot in November. You may have heard of them. There's C.I. 126, which would eliminate party primaries in Montana, replace them with a top four primary system. That means the top four vote getters in a primary would advance to the general election regardless of party. There's also. C.I. 127 which would require that general election candidates get more than 50% of the vote in order to win their election. And finally there see, C.I 128, which would enshrine abortion access in Montana's constitution. But the reason I wanted to talk about them, Jackie, is if I think it's important to clarify for your listeners, if any of these measures pass in November, is it clear whether the legislature has any power to alter them or alter the outcome in January?
Jackie Coffin So in general, no, there's not a ton that the legislature will do, with the exception of C.I. 127. So. C.I. 126 which is the open primaries, is standalone. A as well as C.I. 128, which is the abortion protection. And so those will just go into the Montana Constitution. C.I. 127, the legislature will be tasked with implementing the system in which those elections are decided, whether it's a Southern style runoff, where the top two candidates would move on to a third election, as you see in some of those southeastern states. Or would it be a ranked choice system? So the legislature will have the power to put in place the way Montana elections will be decided by that 50% margin.
Austin Amestoy As you might have noticed, there's a lot left to unfold over the coming months. We have a whole election to get through and then we get the session here in about four months. But we'll be tracking it all on The Session podcast here. Thank you for thank you to Jackie, Eric and Aaron for previewing the 2024 election and the 69th Montana Legislature. Keep an eye out for more episodes of the session this fall and winter wherever you get your podcasts. I'm Austin Amestoy. Thank you for listening.