More state budget cuts could be on the horizon: How much more can our communities take?

Sep 12, 2017

By MBPC Staff

The Montana Budget and Policy Center staff spent their weekend pouring over the 10 percent reduction plans submitted by each state agency to the governor’s office. These plans, totaling over 220 pages, provide a glimpse at how painful these cuts could be for services for Montana families and support for schools, local law enforcement, and counties.

It’s important to note that these proposed 10% reduction plans are coming on top of $218 million in cuts that happened during the legislative session and this summer.

As we’ve discussed in previous blogs, according to the governor’s budget office, the state now faces a $227 million shortfall. In order to restore the ending fund balance back to where it needs to be, the governor and legislature can make further cuts and/or find new revenue. While the governor has some authority to make cuts on his own, the law limits him to cutting no more than 10% in each agency program. In order to reach the $227 million, the governor would have to take the full 10% of cuts in nearly every program.

In other words, if the governor and legislature do not come together to find additional revenue, the governor may be forced to address the budget crisis entirely through cuts and would have to accept nearly everything contained in the agency reduction plans. In that scenario, the Department of Health and Human Services (DPHHS) would experience the largest cut. According to the department’s reduction plan, the general fund cuts total $105 million and would also result in the loss of $135 million in federal funds, for a total loss of $240 million.

Potential cuts to DPHHS include:

• Eliminate health case management for foster children, provided by Missoula and Cascade County Health Departments and Riverstone Health (Billings).
• Eliminate supplemental payment to foster parents caring for infants and toddlers to help defray costs for diapers.
• Cut orientation and mobility skill instruction for 300 children with low vision or blindness.
• Cut grants for child care providers that help improve quality care.
• Cut over $2 million in funding for non-profit organizations in Billings, Missoula, and Helena that provide housing and support for teenage mothers.
• Eliminate partnership with Children Advocacy Centers that provide multidisciplinary evaluation of children victims of violence. This work and cost would be shifted back to local law enforcement agencies.
• Eliminate funding for mentoring of foster children through eight Big Brothers Big Sisters organizations across the state.
• Cut funding to domestic violence shelters across the state.
• Cut $400,000 provided to tribes to assist with foster care placement of tribal children currently in their care.
• Cut an additional $48 million in targeted case management for individuals with disabilities and those experiencing mental health and substance use disorders (this is in addition to cuts made earlier this year).
• Eliminate funding for services for developmentally disabled and at-risk children ages 0-36 months.
• Eliminate Medicare prescription drug benefits for over 10,000 low-income seniors.
• Cut $6.8 million in services for home and community-based services for seniors and people with disabilities who want to stay in their home or community, likely forcing more Montanans into nursing home care.
• Cut $8.5 million in hospice services.
• Cut $15.5 million in personal assistant services for seniors and people with disabilities living in their own home.
• Eliminate health insurance coverage for direct care workers who are already struggling to make ends meet.
• Cut $23 million in reimbursement rates for hospitals providing care to Medicaid patients, including cuts to payments for Montana’s rural critical access hospitals. These cuts could mean reduced access to services in rural Montana.
• Eliminate Medicaid’s coverage for some dental services, which could impact over 44,000 Montanans and 585 dentists providing coverage to Medicaid patients.
• Cut $1.6 million in chemical dependency treatment.
• Reduce grants to counties for mental health crisis intervention.
• Close 19 offices of public assistance in rural Montana, impacting many families’ ability to access assistance and services.
• Leave significant number of staff positions vacant through biennium (between 8% and 18% of positions in each division will be left unfilled).
• For some remaining Department staff, mandatory furloughs that will cut hours by 7% to 12.5%.

This list is just cuts to DPHHS. Make no mistake, every program in every agency is facing cuts, but there is time to do something about it. The governor and legislators must come together to find a balanced solution to this crisis. Otherwise Montana is set to take a total of $500 million in general fund cuts in this biennium.

While some cuts may be inevitable, common sense measures to increase the tobacco tax and close tax loopholes would mitigate deeper cuts that will hurt our communities. These proposals should be part of the conversation. There are solutions to ensure that our tax system is fair, raise critical revenue, and help Montana be the state we all love to live in.