If Montana were a teenager receiving an allowance, would it spend away or save for a rainy day? And if that rainy day were already here? Such questions will be addressed as Montana receives a projected $73 million from Bush’s economic stimulus plan. Medicaid has already spoken for $23 million, but the other $50 million has no strings attached as yet, and there’s already debate as to where the money should go.
Chuck Swysgood, Gov. Martz’ budget director, advocates holding on to the money and letting it accrue interest for the next two years. “My preference is to put it in the ending fund balance, but I don’t know if that’s going to be an acceptable use for the feds until we see all the criteria” of the stimulus package, says Swysgood.
The budget director contends that spending one-time money on ongoing programs isn’t fiscally prudent.
“I’m not in favor of spending this one-time money [to fund programs] at a level that you can’t sustain in the next biennium,” he says.
Clayton Schenck, legislative analyst with the Legislative Fiscal Division in Helena, says that no one is sure whether or not the state can legally tuck the money away for two years.
“Somebody has to decide what we’re going to do with that money,” says Schenck. “Whether the state can put it into the ending fund balance is a question that we don’t know [the answer to] yet.”
Schenck has requested a formal legal opinion to determine if the governor has the authority to sock the money away. Once that decision is reached, says Schenck, we’ll know if the Legislature will need to call a special session to decide what to do with the money.
House Minority Leader Dave Wanzenreid (D-Missoula) argues that the issue is not whether the money can be used, or by whom, but rather whether or not it should be.
“I wouldn’t argue that all of the money we’re going to be receiving should be used for programs, because, after all, it is one-time money. But we do know that we made massive, massive cuts in human services to people that are the weakest and most vulnerable amongst us,” Wanzenreid says.
Wanzenreid believes that using some of the money now could help offset cuts to services and “take care of the inevitable suffering that we all know is going to take place.”
“Those are valid issues that those folks would bring up,” says Swysgood. “I would assume everybody that got reduced would use the same scenario.”
Swysgood says that the state’s ending coffer is not as big a cushion as he’d like, which is part of the reason he advocates holding the money. Wanzenreid counters that this is because the governor’s revenue estimate for the biennium was far from conservative, and likely far too optimistic.
“I think they need to have that money…to make sure the ending fund balance is high enough so that the governor doesn’t have to start making cuts before the election in 2004,” he says.