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

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.

How Does Montana Stack Up Compared to Our Neighbors?

Montana is falling behind in the investments we need to truly make it a state where we can all live, work, and enjoy all that Big Sky Country has to offer. The picture of the health and opportunity for growth of Montana’s communities, families, and economy is so much more than a tax rate. It’s about the health of our citizens, access to infrastructure like broadband, affordable housing, freedom from hunger, and livable wages. 

Call your legislator today at 406-444-4800 or message them at https://leg.mt.gov/web-messaging/ and urge them to focus on what matters for Montana. Tell them to #chooseourfuture.

Legislative Action: Subcommittee Cuts Nearly $1 Billion from DPHHS Base

The first action of the Joint Appropriations/Finance & Claims Joint Subcommittee for Health and Human Services cut nearly $1 billion from the base over the biennium to start the budget process. The Subcommittee will now devote time merely rebuilding a base, at a time when families, seniors, and people with disabilities who shouldered the brunt of similar budget cuts in 2017 are still hurting. Many Montanans have been struggling this past year. Making additional cuts to home and community based services that allow family members to stay in their homes, cuts to already reduced mental health and substance use disorder services, and cuts critical payments to rural hospitals and health care providers is unconscionable during times like these.

You can learn more about the specifics of the action and where theses cuts come from here.

Present Law Budget: What does it mean and how does it affect our communities?

With the 2021 Montana legislative session less than a month away, decisions made by our state level policymakers will determine how Montanans weather this pandemic. The state budget is a big piece of that puzzle by providing funding for schools, health services, and maintenance of our roads and bridges.

Key budget terms that will be used a lot this session include present law budget, present law adjustments, and statewide present law costs. These are important actions the legislature will take to ensure the state can continue to provide critical services for our communities. Since it has been a while, we should brush up on these terms, so we can track and understand the decisions that will affect our friends, families, and communities.

Present law is the level of funding the state needs to maintain services, at the level and under the laws approved by the legislature in the last session. Present law, by itself, does not include any changes that may be a result of increased school enrollment, services caseloads, or inflation. Those are included in present law adjustments.

Present law adjustments are agency-specific budget adjustments (either up or down) needed to maintain services at the level approved by the legislature since the last budget. This could include changes in the number of people served by the Department of Corrections, the number of seniors or individuals with disabilities accessing nursing home or community services, or inflationary adjustments to provide the same level of services for the next two years. An example of a present law adjustment in the most recent budget is an increase in federal funds for the Department of Public Health & Human to continue to provide existing services for their food and energy assistance programs, given the rise in food insecurity and demand for energy assistance during the coronavirus pandemic. The budget also provides an inflationary and enrollment adjustments to support Montana’s public schools.

Statewide present law costs are costs that are adjusted for all agencies using the same methodology. Increases in the cost of personnel benefits or increases in insurance costs are examples of statewide present law costs. Present law adjustments are different from statewide present law because they are agency specific, and are not applied to all agencies, due to varying agency responsibilities.

While these adjustments to the budget may be construed as “growth,” they are really adjustments to ensure the state can continue to provide critical services at the current level. These are services allowing seniors and people with disabilities to stay in their home and live with dignity, ensuring our children are getting the education they need to succeed, and maintaining health care coverage for nearly one in four Montanans through Medicaid and CHIP.  As we head into another legislative session, we hope policymakers will keep in mind how important these adjustments are to their communities and constituents.

Supporting Montana Communities Is a Critical to Economic Recovery

Going into Montana’s 2021 legislative session, there is a lot of attention on the growth in Montana’s state budget over the past decade. The Montana budget represents the collective investments we make to educate our children, maintain a healthy and trained workforce, care for the elderly, and much, much more. Investing in Montanans through our state budget allows us to keep a healthy, running economy.

Overall, Montana’s economy has been doing pretty well the last 10 years. State gross domestic product (GDP) has increased by 47 percent from 2009 to 2019 (not adjusted for inflation), while per capita personal income in the state has increased by 45 percent over the same period.

Montana’s state budget has grown roughly at the same rate, and much of that growth has been in federal funding, not state funding. State level expenditures increased by 54 percent from the 2009 to 2019 biennium, not too different from the 47 percent increase in state GDP and 45 percent increase in personal income. A big portion of this growth comes from Montana expanding Medicaid and providing affordable health insurance to 80,000 Montanans paid at low wages. Medicaid expansion was estimated to have created 5,000 jobs and $270 million in personal income annually in Montana. Medicaid expansion is covered almost entirely through federal funds, and as a result, expenditures from federal funds increased by 66 percent from the 2009 to the 2019 biennium.

While attention may be on budget growth over the decade, we must also remember the level of cuts that took place in 2017 that devastated services for many communities. Following the 2017 budget cuts, many Montanans, especially those living in rural communities, experienced severe shortages of services, such as behavior health services, public assistance support, and home and community-based services that their families and communities rely on. While some of these cuts were restored in 2018, many communities continue to struggle to access adequate services.

The 2021 legislative session comes at an important time. Montanans have been through a lot in the last year and are beginning to see a hopeful recovery from this unprecedented pandemic. The legislature will decide whether to continue following the path of economic growth and community health that we’ve seen over the past decade, or to cut the services that our families need. Let’s continue to allow our budget to keep pace with economic growth and fund education, public health, and support the elderly with a level of dignity that Montanans deserve.