Lawmakers have priority: the economy

By JIM MANN/The Daily Inter Lake

The balance of power has changed in Helena and lawmakers are hoping the political tone has as well as they prepare to confront expected economic challenges.

" The economy" was unanimously cited as the priority for the upcoming legislative session by politicians contacted by the Inter Lake last week.

They also predicted that the 2009 session would be different from the acrimonious 2007 session, which ended with the Legislature failing to pass a budget for the first time.

This time around, Republicans control the Senate with 27-23 majority, the House appears to be split 50-50 (pending vote recounts expected in two House districts), and Democratic Gov. Brian Schweitzer remains in power.

" I think the tone will definitely be different because the Republicans control the Senate now and it's a 50-50 House," said Rep. Jon Sonju, R-Kalispell. " I think the governor will be forced to work with the Republican caucus. Last session, it was his way or no way. I think the tone is not going to be as partisan, at least I'm hopeful for that. I think some lessons were learned on both sides [since the last session] and that's a good thing."

Sonju and Rep. Mike Jopek, D-Whitefish, sit on the bipartisan Revenue and Transportation Committee, which will develop a new revenue forecast for the state next week.

Recent forecasts have projected the state would have as much as a $787 million surplus for the next biennium, but Sonju, Jopek and others expect that forecast to drop significantly to reflect expected economic trends.

And it did by a whopping $500 million Friday, down to $287 million, according to a report from the Legislative Fiscal Division.

" I think it's going to be a belt-tightening session with fiscal conservatism," Jopek said. " The number-one issue is the economy."

Jopek said the split House will feature evenly divided committees, with Republicans chairing half of them and Democrats the other half.

" You're almost forced in a lot of ways to reach across the aisle. You don't have one side jamming the other because they think they have the advantage," said Jopek, adding that he enjoyed serving in a 50-50 divided House during the 2005 session.

State budgeting starts in the House, but the Senate gets the last crack at it, giving the new Republican Senate majority an advantage.

" Personally, I think it's going to mean that there is a distinct separation between the executive and the legislative," said Sen. Greg Barkus, R-Kalispell, recalling that in 2007, Senate Democrats and the governor worked together to dilute GOP provisions in the budget. " We will have a real say in the outcome of this legislative session."

Barkus said Republicans will be looking to " hold the line on spending" and to stimulate a troubled economy with measures such as eliminating a tax on business equipment and providing long-term property tax relief.

Sen. Dave Wanzenried, D-Missoula, said he is optimistic about the session, noting that House members will have to find a balance just to advance a budget to the Senate. " I think all of us realize that we're in for tough economic times and we need a lean budget that takes care of the basics."

Wanzenried said he is concerned about recent layoffs across the state that will have a " multiplier effect" on other businesses.

" You look around at 20, 30, 40 jobs lost here and there, it gets to be a pretty big number," he said. " Those things are going to be an important part of our discussion."

Sen. Verdell Jackson, R-Kalispell, said he will be concerned about any " surplus" forecast because he does not believe any more growth in state government spending can be sustained over the long term.

" At the national level, we are going to lose some larger corporations" and that will impact small businesses in Montana that serve as subcontractors, he said. " A lot of people don't realize that these bigger companies have subcontractors in Montana that are small businesses."

Jackson said eliminating the business equipment tax is necessary because it does not account for whether a business is making or losing money.

" People don't realize how hard that tax is to pay when you aren't making profits," he said.

Both Wanzenried and Barkus said the Legislature will be faced with the outcome of a revived lawsuit alleging that the state does not adequately fund its K-12 school system.

They said the unknown of just how much money will be necessary to satisfy a court order and what fashion it should be distributed could have a substantial impact on the budget.

Barkus said the education community needs to " come to the Legislature with a formula that is workable and realistic, that gives more to teachers and into the classroom" and it must be a remedy that will terminate future questions about funding adequacy.

But just recently, Barkus said, he received a memo from the Montana School Boards Association with a " wish list" calling for $260 million in annual K-12 spending increases. That's more than twice the currently projected surplus for the next two years.

" I don't think that's realistic and it still doesn't provide us with a formula," Barkus said.

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com