Who'll pay, and how much, for Montana's coming budget cuts



Back in late January, Gov. Steve Bullock used his State of the State address to send a message to the Republican majorities in the 2017 Montana Legislature: When tackling the painful and oft-controversial task of cutting the budget, be fair.

You've no doubt heard the buzz, read the headlines, maybe even tuned in to a legislative committee hearing or two. Lawmakers in Helena are trimming much more than fat this time around. Stagnant wages left the state with less-than-stellar income tax revenues last year. Couple that with sizable drops in oil and gas production taxes and corporate income taxes, and Montana's elected officials are clearly faced with some tough decisions. How tough? Well, that's what we're here to find out.

  • cover photo by Amy Donovan

The conversation started last fall when Bullock rolled out a budget proposal calling for $74 million in cuts to state agencies. His general-fund budget pitch came out just north of $4.7 billion, and he insisted on several tax increases so as to close out the biennium with $300 million still in the coffers. The Legislature then upped the ante, adding a further $50 million in reductions to Bullock's requested cuts. The governor's wish-list revenue enhancements—including a suggested 6-percent consumption tax for medical marijuana and a higher income tax rate for Montanans raking in $500,000 or more a year—haven't gotten much traction either. Long story short: The past few months have been far from pleasant at the Capitol, and despite impassioned overtures from numerous agencies—as well as the Montana residents they serve-the Republican-crafted budget contained in House Bill 2 was passed to the state Senate last week.

Of course, Montana's not alone in its budget pain. The news cycle this month has been dominated by panic over the sweeping cuts proposed by President Donald Trump to federal departments like Agriculture ($4.7 billion), Health and Human Services ($15.1 billion) and the EPA ($2.5 billion). Trump has also proposed eliminating funding entirely for 19 agencies including the National Endowment for the Arts, the Corporations for Public Broadcasting, the Chemical Safety Board and the U.S. Institute of Peace. Meanwhile, he wants to increase defense spending by $54 billion.

While alarm bells are sounding at the national level, they're sounding here, too, as the budget crafted in Helena is where the rubber really meets the road for Montanans—and where citizens can arguably exercise far greater influence. What follows is a glimpse into a few key areas of the state budget in which proposed cuts go particularly deep. It's by no means a complete guide to the haggling between legislators and the executive branch over how to balance the state's books, but it does provide insight into how the conversation has evolved since the first gavel fell in January. We offer it in the hope of inspiring readers to dig deeper, pay attention, and speak up. Because no one in Montana is escaping the process unscathed.

  • photo by Amy Donovan

Higher education

There's one word in the Montana University System vocabulary that's gone unspoken for most of the last decade: tuition. Tuition hasn't budged at the state's flagship campuses, including the University of Montana, for six of the last 10 years, thanks to a "tuition freeze" policy under which state lawmakers agreed to cover basic cost increases to keep the universities running.

Now comes the thaw. Even under the budget proposed by Gov. Bullock last November, students likely would have been asked to dig deeper into their pockets to pay for school going forward. The Montana House of Representatives is after a bigger shakedown still. The budget bill passed by the House on March 16 cuts university system funding by $6.2 million each of the next two years, a roughly 2.5 percent drop.

The Montana University System hasn't taken a cut that large in more than a decade. In fact, state support for campuses has increased by $42 million since 2012 (see graph below). But, as Commissioner of Higher Education Clayton Christian argued to legislators, that hardly means Montana colleges are flush with taxpayer cash. Twenty-five years ago, the state funded more than 76 percent of university system campus budgets. This year it paid for 38 percent. Montana ranks 48th among states in total funding per student, and Christian worries that any budget cuts could plunge it to "dead last."

*red indicates projected budget levels currently proposed under House Bill 2 -  - Source: Office of the Commissioner of Higher Education and Montana Legislative Fiscal Division
  • *red indicates projected budget levels currently proposed under House Bill 2

    Source: Office of the Commissioner of Higher Education and Montana Legislative Fiscal Division

The Legislature won't set tuition rates, though. As House budget-master Nancy Ballance, R-Hamilton, reminded legislators at a recent committee hearing, that's the Board of Regents' job. And the regents are unlikely to plug the budget hole with tuition alone, in part because the hole is larger than it looks on paper. To maintain current operations, the university system would require a budget bump of around $14 million annually, according to Deputy Commissioner for Planning and Analysis Tyler Trevor. To account for that gap and the 2.5 percent cut, tuition rates would have to increase by roughly $850 per year for Montana students enrolled at the flagships. Currently, UM and Montana State University are something of a bargain, charging on average $2,000 less per year than their regional counterparts.

Meanwhile, UM and several other campuses are already dealing with shrinking budgets due to declining student enrollment. "To compound cuts on top of those cuts would be pretty catastrophic for some of those institutions," Christian told the House Appropriations Committee this month.

He was followed by a train of supporters, including a group of students who spoke of the importance of higher education in their lives. When they finished, Ballance assured them the proposed cuts aren't personal.

"Any cuts that we make in no way reflects our opinion of the value we believe the university system brings to you," she said, "and that you bring to the state of Montana."


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