Early Action on the Budget Leaves Major Gaps, While Tax Breaks Move Forward

Mar 07, 2021

By Heather O'Loughlin

Montanans care deeply about the well-being of their families and neighbors. They want a hopeful and prosperous future for their children, safe communities, and a robust state economy that supports quality jobs and thriving businesses – big and small. As Montana's 2021 Legislature moves forward with the state budget, it is important to prioritize those most impacted by the past year. By supporting those families, we create a state where we can move forward to a better state for everyone. And by resisting calls to cut taxes for those who are already well off, we can retain the funds our state needs to be bold, forward thinking investments in our future.

Unfortunately, legislative subcommittees in charge of first consideration of the state budget have taken damaging cuts that will harm children, families, and communities across the state. These proposed cuts come at the same time the Legislature is moving forward with tax cuts that will significantly reduce state revenue and make it challenging to invest in the long term.

As the full House Committee on Appropriations begins its hearings on HB 2, the state’s budget bill, here is a snapshot of the actions taken by initial subcommittees and where some of the state agencies stand.

Department of Public Health and Human Services

The budget for DPHHS is $162 million below the executive’s proposed budget, with deep cuts to state Medicaid funding that will also result in the loss of federal matching funds. These reductions include:

• $128 million funding reduction tied to Medicaid caseload across all Medicaid programs;
• $14 million general fund reduction (replaced with federal funds) aimed at eliminating continuous eligibility for adults accessing coverage through Medicaid expansion;
• $21 million general fund reduction that would effectively end the Comprehensive School and Community Treatment (CSCT) program (efforts to provide even stopgap funding failed to pass);
• $10 million cut in three divisions serving adults and children with disabilities (ending a fund transfer from another account, thereby reducing the divisions’ budgets);
• $2.5 million in additional vacancy savings across six DPHHS divisions;
• $2.4 million general fund cut, eliminating the Stars to Quality program supporting Montana’s child care providers;
• $481,000 cut, aimed at eliminating the two tribal health positions; and
• $770,000 cut in federal pass-through funding for the refugee services program.

The subcommittee did provide a modest provider rate increase of 1 percent for each year of the biennium for some Medicaid providers (pared back from a proposed 2 percent rate increase), as well as, $1.50 increase to the foster care provider daily rate (reduced back from an original proposal for a $5 increase).

Department of Corrections

The Corrections' budget is roughly $14.5 million below the executive's proposal, which was already less than the previous November executive proposed budget. The subcommittee did not approve several proposed budget adjustments, including:

• $3.5 million in the director’s office, including adjustments to fixed costs and personal services;
• $5 million in probation and parole, including reduction of new proposals to add presentencing investigation positions, additional officers, and a significant increase in vacancy savings rate; and
• $5 million reduction in the clinical services division, eliminating funding for hepatitis C treatment services.

Office of Public Defender

The budget for OPD is $800,000 below the executive’s proposed budget, as the subcommittee did not approve any caseload adjustment over the biennium. Governor Gianforte’s proposal for caseload growth was already a reduction from the previous November proposed budget. (The decrease compared to the previous November budget is more than $4 million difference.)

Office of Public Instruction

Overall, legislative action is mostly consistent with the executive's proposed budget, including $80 million present law adjustment for K-12 schools (down slightly from the executive's budget) and implementing new funding for teacher recruitment.

The subcommittee for education also approved a line item to transfer the Montana Indian Language Preservation program from the Department of Commerce to the Office of Public Instruction, with funding at $1.5 million over the biennium.

Office of Commissioner of Higher Education

The budget for Montana’s colleges and universities currently sits slightly above the executive’s budget. This includes new one-time-only funding for research ($1 million), career and technical education program ($550,000), and need-based financial aid ($750,000). The subcommittee also provided $375,000 to continue high school equivalency test (HiSET) preparation through the tribal colleges.

Department of Revenue

The budget for the Department of Revenue is $8.5 million below the executive’s proposed budget. This is primarily due to the subcommittee not approving additional personnel needed to implement the voter-approved I-190 to legalize and tax recreational marijuana.

What’s Next?

The full House Committee on Appropriations will spend this week hearing from agencies on HB 2 and taking public comment. Legislators should prioritize restoring funding for critical services and investing in long-term solutions that support families and communities.