Mixed emotions surround final budget plan

By WALT WILLIAMS Chronicle Staff Writer

HELENA -- Six days after he returned to the state capital for the start of the state Legislature's special session, Sen. Joe Balyeat, R-Bozeman, left the Senate chamber disappointed in the final outcome.

CHRONICLE FILE PHOTO Visitors and legislators are seen leaving the state Capitol in Helena recently. Balyeat voted "no" to every bill that came before the Senate during the special session, not out of some kind of political statement, but because, in his opinion, every bill called for too much spending and not enough tax relief.

"This special session did little to change a state budget that is totally out of control, a state budget that's $10,000 for every man, woman and child in the state," he said.

Such was the end of the 2007 Legislature, where every lawmaker left at least a little unhappy, disappointed that a certain tax proposal didn't pass, or an agreement wasn't reached on this or that part of the budget.

Lawmakers ultimately approved a state budget that called for roughly $3.2 billion in general fund spending over the next two years, a 22.5 percent increase over the previous budget cycle.

When federal and special funds are added to the mix, the total state budget comes to $7.8 billion, which breaks down to $10,000 for every person in the state.

A little less than $100 million of the state's project $1 billion surplus will be returned to homeowners through one-time $400 rebates, plus there is the possibility of some income tax credits if state revenues go over a certain amount.

The Democrats criticized Republican plans for permanent property tax relief as unsustainable, Balyeat said, but the budget that passed was unsustainable because it called for too much growth in government.

If there's anything that's permanent in state government, it's expanding government programs, he said.

"I've always said it really doesn't matter what your religion, if you truly want eternal life, just become a government program," he said.

Sen. Bob Hawks, D-Bozeman, was mostly pleased with the outcome. He said much of the discussion focused on immediate tax relief, but that overlooked the work lawmakers did to stave off future tax increases by investing in state programs.

"There was well over $200 million in tax savings that we created long term by the investments we were making," he said

Hawks pointed to the Legislature's work on the public employee pensions, which are facing a budget shortfall over the coming decades. Some of the surplus money was budgeted to stave off that future shortfall.

One disappointment for Hawks was that both sides didn't come to the table to work out some sort of tax plan acceptable to both. The House adjourned for the session without giving the Senate a chance to work on a compromise tax bill.

There could have perhaps been some sort of permanent property tax relief had that happened, he said.

"It's an incomplete job," Hawks said, "but I don't know you ever leave the session thinking that everything has been completed."

The final budget bills included several items for Bozeman and the surrounding area. In some cases, local officials got what they wanted; in others, they received less than they were expecting.

Lawmakers authorized:

€ a large increase in public school funding, with one bill, Senate Bill 2, funding all-day kindergarten and some capital improvements. However, some of the new funding is tied to specific programs, and as a result Bozeman school officials say the district faces a $450,000 shortfall.

€ a freeze in tuition at Montana State University and the state's other colleges for two years.

€ spending up to $2.4 million out of a special state fund to reimburse Bozeman the cost of cleaning up toxic material at the new library site.

€ spending $2 million to fund historic preservation work at Virginia City and Nevada City.

€ allocating $2 million for water and sewer projects in Manhattan, Three Forks and West Yellowstone.

€ spending $400,000 to pay for satellite delivery of Montana PBS.

€ setting aside $10 million for Access Montana, a state program to purchase new state parks and fishing access sites.

€ contributing $28.5 million toward renovation of Gaines Hall at MSU.

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