House Appropriations takes up state budget

By Mike Dennison, IR State Bureau
A key House committee made its initial moves Wednesday in piecing together the state budget, but left unresolved one of the biggest issues dividing Democrats and Republicans: Funding for an expanded health-insurance program for Montana children.

Afterwards, House Appropriations Committee Chairman Rep. John Sesso, D-Butte, said he remains hopeful the funding for Healthy Montana Kids might be resolved by the time the major budget bills emerge from the committee.

“I hope we can demonstrate that we’re making enough progress that that might occur,” he told reporters after the first marathon mark-up session of House Bill 2, the main budget bill before the 2009 Legislature.

By “progress,” Sesso means action by the 20-member committee to cut enough spending from HB2 to possibly free up money for Healthy Montana Kids.

Health Montana Kids is the program approved by Montana voters last November, to expand government-funded health insurance for up to 30,000 low- and middle-income kids that are now without coverage.

The panel whacked about $15 million out of human-service spending in HB2 Wednesday, but still needs to trim further, Sesso said.
But most of the $15 million cut out of HB2 isn’t really a budget reduction, because committee members indicated they intend to replace those cuts with money from Montana’s share of the federal economic stimulus money approved by Congress.

“I don’t consider this a cut,” said Rep. Penny Morgan, R-Billings, in offering one proposal that reduced HB2 spending by $10 million. “I consider this a fund transfer.”

Wednesday’s actions are all part of a complex budget dance being choreographed by the 2009 Legislature, the Schweitzer administration and the federal government, which is pouring some $800 million into Montana’s budget coffers over the next two years.

HB2 is the main piece of the proposed $8 billion state budget for the next two years, but it will be closely linked to a companion bill that contains the $800 million in federal stimulus funds. That bill will be introduced next week.

As state tax revenues fall because of a deteriorating national and state economy, lawmakers are looking to the stimulus money to help shore up the state budget although Montana’s budget is in better shape than most of the other 49 states.

Wednesday was the first day of action on HB2 by the House Appropriations Committee, which aims to finish the bill this week and send it to the House floor. Next, it will tackle the stimulus-funding bill.

For the most part Wednesday, members of the politically divided panel worked in tandem, unanimously passing several proposals to scale back spending for the next two years.

But when it came to a decision on Healthy Montana Kids, they locked up on a 10-10, party-line vote.

Morgan offered an amendment that would increase state funding for the Children’s Health Insurance Program by $10 million over the next two years, to add thousands of children to the program and capturing millions more in federal matching funds.

The panel’s 10 Democrats, however, voted against the proposal, saying they would agree only to fully funding Healthy Montana Kids, which expands both CHIP and Medicaid, another government health insurance program.

“I think that this amendment takes us in the wrong direction of what Montana voters told us loud and clear last November,” said Rep. Dan Villa, D-Anaconda.

Voters approved the expansion by passing Initiative 155 by a 70-30 margin. Fully funding I-155 would cost about $35 million in state money over the next two years.

Sesso said after the meeting Wednesday that if the committee can continue working together to reduce spending in HB2, the issue of Healthy Montana Kids may be revisited.

“We made some progress today in trimming the section,” he said. “I sensed a cooperation that I want to encourage as we move through the sections (of the bill). Maybe we’ll reconsider some things that we left on the table.”