With economic uncertainties facing the state, the Democratic governor also insisted that the Legislature keep $250 million in the bank as a general-fund surplus throughout the next two-year budget period.
“This international credit crisis doesn't seem to have landed in Montana,” Schweitzer said. “If it does and when it does, we have $250 million in the bank to withstand the storm. If there are declining revenues, we won't have to raise taxes or reduce programs.”
He acknowledged that not everyone will like his budget, and not all state programs will get much additional money. However, he said that he's been predicting since January it would be “a belt-tightening” budget.
“Now is the time to batten down the hatches,” he said.
His budget calls for spending $3.92 billion in state general fund money and one-time-only funds over the next two years, compared with the $4.02 billion being spent the current two-year budget period. That's about a cut of about 2.5 percent, or $100 million, coming primarily from large reductions in one-time spending.
However, ongoing general fund spending will rise by about $337 million or by 9.7 percent over the next two years in Schweitzer's budget. These totals don't include one-time-only spending.
Comparisons for the all-funds budget, which also includes federal funds, were not immediately available.
Schweitzer's budget goes to the 2009 Legislature for its consideration.
“We're still looking at a significant increase in general fund spending, which is the real concern because that is ongoing money,” said incoming Senate President Bob Story, R-Park City. “If we don't have a sustainable revenue stream to support it, we're going to have to look at further reductions.”
The new House speaker, Rep. Bob Bergren, D-Havre, endorsed Schweitzer's proposal to keep an actual $250 million surplus.
“With the economic downturn of the nation and trying to shield Montana from the inevitable recession that will happen, it's time to leave a little grain in the bin.”
Schweitzer likened the state's situation to that of many Montana families.
“We actually have the money today; the challenge is not to overcommit our spending,” Schweitzer said. “Just like many Montana families, we're going to have to tighten our belts.”
If the state doesn't need to use $250 million surplus over the next two years, Schweitzer said he will propose tax cuts in the 2011 legislative session. In 2007, he won passage of a plan that gave $400-per-household rebates to Montana homeowners totaling nearly $95 million.
The budget contains few new programs.
He proposed setting aside $25 million in one-time-only funds to retrofit state and university system buildings to reduce energy consumption. It's part of his proposal to cut state government's energy consumption by 20 percent in 2010.
Schweitzer's budget sets aside $20 million for each of the next two years to implement the initiative approved by voters earlier this month to expand the Children's Health Insurance Plan to cover more uninsured children.
His budget would boost K-12 school funding by more than $88 million over the next two years, which would amount to a 3 percent increase each year on the current base.
Meanwhile, a decision is pending in district court on a challenge filed by some school districts and education groups that contend the state school funding system is unconstitutionally inadequate.
Higher education is slated to see an increase of $35 million over the next two years, which Schweitzer called the second largest in state history. However, unlike two years ago, there are no guarantees that tuition won't be raised for in-state students.
Schweitzer said the Board of Regents is an independent board that sets tuition, but he hopes members “would make the appropriate decision to hold the line on tuition.”
The budget includes what budget director David Ewer said was enough money for “modest” increases in pay for state employees. However, contracts with unions representing state workers have not yet been negotiated.
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Fred Garvin wrote on Nov 16, 2008 12:46 PM: