End is in sight for Legislature

By Mike Dennison, State Bureau

Key lawmakers Saturday finally struck a tentative deal on the state budget, breaking a week-long gridlock and putting the 2009 Legislature on course to finish by its scheduled 90th day next week.

“I think that it’s going to all work out, with the changes that we have agreed to,” Rep. Jon Sesso, D-Butte, said as House and Senate conferees announced the deal at the Capitol Saturday morning. “It’s not as much (spending for some programs) as I would’ve hoped, but apparently it’s more than other people wanted. As usual, we are trying to find the middle.”

The deal, which still needs final approval by the full Legislature and Gov. Brian Schweitzer, includes implementation of Initiative 155, the voter-approved expansion of government health insurance for children in low- and moderate-income families.

It also will give public schools a higher, permanent increase in state funds than had been originally proposed by Senate Republicans.

“I don’t think everybody got exactly what they wanted, but I think it’s a budget that we can live with,” said Sen. Keith Bales, R-Otter, who chairs the Senate Finance and Claims Committee.

Sesso, who chairs the House Appropriations Committee, and Bales led the negotiating between the House and Senate this week. They agreed to the deal’s final framework early Saturday morning, capping a week of back-and-forth between the Republican-controlled Senate and the House, which is split 50-50 between Democrats and Republicans.

Bales, Sesso, other key lawmakers and top legislative staff continued to work out the details Saturday afternoon, preparing amendments to House Bill 2, the major budget bill.

They said the agreement should be ready for ratification by House-Senate budget conference committees on Monday. The Legislature’s final scheduled day is Tuesday.

HB2 contains most of the two-year, $8 billion budget for state government. The deal also includes Montana’s $880 million share of federal economic-stimulus money, which will fund scores of building projects and other programs.

Saturday’s deal broke a stalemate between the House and the Republican-controlled Senate, which had amended the budget bills into a more conservative spending plan than passed by the House in March.

Senators had pared back the children’s health-insurance program to a level less than what had been approved by voters, and shrank permanent spending for public schools and other state agencies.

Elements of the deal struck Saturday include:

n Full implementation of the children’s health insurance program beginning Oct. 1, at the level approved by voters, offering government-financed insurance to families earning up to 250 percent of the poverty level, or $55,000 a year for a family of four.

However, part of the state money earmarked for the program, known as Healthy Montana Kids, will flow into the state treasury, for possible use in other programs.

The assumption is that as Healthy Montana Kids ramps up in its first 21 months, its entire state allocation won’t be needed.

n Increasing basic state funding for public schools at 3 percent in each of the next two years, and funding only a portion of the increase with one-time federal money in 2010. Senate Republicans had wanted to use federal funds for two-thirds of the entire, two-year increase.

The tentative deal will leave schools with a 1 percent permanent increase this year and a 3 percent permanent increase next year.

• Backing away from across-the-board cuts in certain government agencies, to ensure they won’t have reductions at levels deeper than other agencies.
• Some additional on-going funds to human-service programs that had been looking at a $115 million cut two years from now.
• A fiscal year-end cushion in mid-2011 of about $250 million, which is what both the governor and most lawmakers had sought, in case tax revenues come in lower than expected.

Gov. Brian Schweitzer also must sign off on the product, and his budget director, David Ewer, said Saturday the governor hadn’t had a chance to review the proposal.

“I would want to respectfully alert folks that an agreement between the two houses may or may not comport with what Governor Schweitzer wants,” Ewer said.

Sesso, however, said he had “high hopes” that Schweitzer would find the budget deal acceptable.

“I’m comfortable that the product we are suggesting would past muster, and we will work with (the governor) in the next two days to see that that’s the case,” he said.

Rep. Llew Jones, R-Conrad, a member of the HB2 conference committee, complimented Bales and Sesso Saturday for their negotiation work .

“I think you have both adequately displayed that you’re willing to make each other bleed for your philosophies,” he said, “but nobody bled to death.”