Gov’s office: $70M in `triggered’ state budget cuts will occur - KTVQ.com | Q2 | Continuous News Coverage | Billings, MT

Gov’s office: $70M in `triggered’ state budget cuts will occur

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State Budget Director Dan Vills State Budget Director Dan Vills

As expected, the state must implement widespread budget cuts triggered by lower-than-projected tax revenue, Gov. Steve Bullock’s budget director announced Tuesday.

The revenue shortfall means that state spending must be cut $70 million for the next two years, including a $13 million across-the-board cut for most state agencies and programs and $11 million in cuts to mental-health and other health programs that aid the poor and disabled.

“We will manage this as we always have,” said the governor’s budget director, Dan Villa. “We will make sure that our fiscal strength continues.”

The bill triggering the cuts also calls for transferring $30 million out of the state firefighting fund to shore up the budget for the next two years – just as the state begins spending on what’s expected to be an expensive firefighting year.

A law passed by the 2017 Legislature and signed by Bullock in May outlined specific cuts that will occur if tax revenues didn’t hit certain triggers by June 30.

Villa said revenue fell short of the lowest trigger point by nearly $30 million, meaning that all of the cuts will be implemented.

Villa castigated the Republican-controlled Legislature for adopting a revenue estimate that was far too high, and for rejecting the Democratic governor’s proposals to raise taxes on Montana’s wealthiest earners.

“They added $100 million to the revenue estimate because they didn’t want to make any tough decisions,” he told reporters at the Capitol. “We warned them from the beginning that their revenue estimates were too high.”

He said Bullock proposed a new tax bracket “so the highest income-earners weren’t paying less than the same effective tax rate as minimum wage-earners,” but that Republicans wouldn’t consider it.

“What we had was a Legislature that looked at our budget, said this is dead-on-arrival, and they had to then come up with their own plan,” Villa said. “We’re now coping with that.”

However, the governor’s budget office proposed some of the cuts outlined in Senate Bill 261, which included the triggers and passed with bipartisan support.

Senate Majority Leader Fred Thomas, R-Stevensville, said in lean times, families across Montana have to prioritize their spending – and that state government must do the same.

He said SB261 attempted to outline cuts in “non-essential spending” that would occur if revenues didn’t materialize.

“I can tell you that in tough economic times, the last thing the taxpayers of Montana need is higher taxes,” Thomas added.

The spending cuts that will now occur also include:

  • About $7.6 million set aside for a 1 percent raise for state employees – although Villa said the Bullock administration still plans to find money within agency budgets to pay the raise.
  • About $12 million in delayed payments to public schools for facility repairs and data tracking student achievement.
  • About 16 percent reductions for the State Library and Montana Historical Society.
  • About $5.6 million in block grants for local governments.

About Mike Dennison

MTN Chief Political Reporter Mike Dennison joined MTN News in August 2015 after a 23-year career as a newspaper reporter covering Montana politics and state government. While some may believe that politics are boring, Mike firmly believes that's not the case if you tell the story with pizzazz and let people know why the story is important.
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