The 2003 Legislature is entering the final stages of its tortured existence and it is an understatement to say this session will not go down in the history books for its visionary leadership and wonderful accomplishments for Montana. Confused by the vagaries of a clueless governor and dazed by the calamity of war in Iraq, the session shambles to its close like a beggar seeking refuge for the night in the dubious safety of a dark corner. Before they go, however, they must answer the pivotal question with which the session began: “Where will we get the money to balance the budget?”
Gov. Martz, who has been as invisible and ineffective throughout the legislative session as any governor in recent memory, remains bunkered in her office. As recently as last week, she was still “praying to God for a miracle” that would convince legislators to support her lame plan to pull $93 million out of the Coal Tax Trust. God, however, must be too busy with the horrendous slaughter taking place in Iraq to pay much attention to Martz’ pleas.
Someone should get the governor a horse-size reality pill. Numerous votes in recent weeks have all failed to reach the three-fourths margin needed to dip into the Coal Trust under a tax-and-spend “compromise” put forth by Republicans. Under the plan, $29 million—less than a third of what Martz wanted—would come out of the Trust for this biennium’s spending and be repaid over 10 years by a “temporary” increase in cigarette taxes.
The plan falls far short of the fiscal responsibility that Repubs claimed to epitomize when they ran for office, since it requires a full 10-years’ worth of taxes to “backfill” a mere two years’ worth of spending, thus only digging the state deeper into a budget hole. Despite being fixated on busting the Trust for ongoing state spending, even the Repubs have to admit that $29 million isn’t really worth the effort since it’s a mere one-half of one percent’s worth of the state’s $6 billion biennial budget.
For their part, the Demos deserve credit for holding their ground—well, at least some of the Demos. Many, convinced that taking money out of the Trust that would be repaid with interest didn’t formally constitute a Trust raid, voted to support the Repub “compromise.” But even with their support, garnering the necessary three-fourths vote didn’t happen. In recent days, as if coming out of a fiscally-induced fog, a number of those who initially supported the measure have backed away from it. Yet the question still remains: “Where will they get the money?” The answer may be in a new plan that gets more money with fewer votes.
Under a new proposal, the target would switch from the Coal Trust to the newly-formed Tobacco Settlement Trust approved by voters in the last election. While it may shock Montana voters to see the Tobacco Trust ripped off in its infancy, the reality is that it only takes two-thirds, not three-fourths, of the Legislature to crack this baby open. Preliminary estimates say the Legislature could get up to $60 million from the Trust and use the same mechanism—higher cig taxes—for the payback.
Obviously this plan, like the Coal Trust plan, still falls far short of real fiscal responsibility. But it has a couple of things going for it. First and foremost is the lower vote needed for approval. Even with die-hard “no new taxes” Republicans and Demos averse to busting trusts for ongoing spending, getting 67 votes in the House is way easier than getting 75. Second, paying back the Tobacco Trust with a tobacco tax increase makes more sense. Since the Tobacco Trust was established to address the burgeoning health impacts from tobacco use—and raising the tax on tobacco products is projected to force some smokers to quit entirely—there is some logic to the proposal.
Plus, there’s another move underway to make the tobacco tax increase permanent. To be sure, the artful dodgers of the Republican majorities don’t want to take responsibility for the tax increase, so they are working on a referendum for a state-wide vote in June. Given that about 80 percent of Montanans don’t smoke or chew tobacco, it’s a pretty safe bet that any increase in tobacco taxes will pass public muster.
Two things are at work here. First, even the Repubs are facing the harsh realization that the hundreds of millions of dollars in tax breaks they have handed out to their corporate buddies over the last decade are busting the budget. Second, they are fearful that if they don’t send out their own referendum someone else will do it—and it’s likely to be a lot larger tax increase than the tobacco lobby would like to see.
Of course, since neither proposal has passed the Legislature, it’s tough to predict what will happen when and if they reach the governor’s desk. Martz, who’s still down on her knees praying to God to help her bust the Coal Trust, may well rise up in all her righteous indignation and threaten a veto. But if she does, she might want to consider the fact that referendums, like putting a tobacco tax increase to the people, don’t require her signature or approval. She might also consider the obvious advantages of going after the much easier target of the Tobacco Trust. And who knows, maybe even God might find that idea more palatable.
We are down to the closing minutes of this long and not-very-illustrious game and you can be sure that both parties will take the opportunity to bludgeon and blame each other in the coming weeks. Whether they’ll pause long enough to actually accomplish something by working together remains to be seen. The endgame is in play however, and one way or another the 2003 Legislature will soon be just a bad memory.
As Martz herself might say: “Thank God!”
When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Missoula Independent.