Area legislators give session mixed reviews

Flathead legislators returned home last week with varying degrees of satisfaction in approving a modest, balanced budget, but they also returned with concerns about whether the state's spending plan can weather a turbulent economy.

The state's general fund budget includes 1.6 percent spending growth over the last biennium, but it also includes $250 million in reserves, mainly as insurance should state revenues decline over the next two years. And most of the Flathead delegation say that revenues will be considerably less than expected.

"We've got a pretty good cushion, but I'm not comfortable with the economy," said Sen. John Brueggeman, R-Polson. "I would say we are all pretty much holding our breaths."

Actual tax collections are lagging behind last year's by up to $110 million so far, said Brueggeman, who believes there is potential for receipts to spiral downward further.

Oil- and gas-tax collections are down, and recent layoffs announced by companies such as Plum Creek Timber Co. will have a collective effect on state receipts. If taxpayer refunds increase, that also will result in a shrinking general fund reserve.

Rep. Jon Sonju, R-Kalispell, said there "absolutely" is potential for a special session in which lawmakers would have to cut into program spending.

Sonju said he voted against the state spending bill only because he thinks the revenue forecasts that it's based on were too optimistic.

"I think we are in uncharted territory economically, nationwide and in Montana," Sonju said.

The state had a projected surplus of nearly $1 billion last year that evaporated in a matter of months. "Just as a businessman, that scares me," said Sonju, whose family operates a manufacturing business in Kalispell.

Sen. Greg Barkus, R-Kalispell, said the state's next revenue forecast is due in mid-May, and he expects it to be 'significantly lower" than the last forecast that the budget is based on.

Barkus said it's typical that lawmakers are "never totally happy" with the results of a session, and in his case he is disappointed in legislation intended to mitigate the impacts of a six-year reappraisal of property values. Because of constitutional equal-protection provisions, Flathead County and other counties that had sharp increases in property values will not get as much relief as he had hoped.

Barkus said he also is greatly disappointed in the Legislature's failure to reduce taxes on business equipment.

Sen. Ryan Zinke, R-Whitefish, shares in that disappointment, being the sponsor of a bill that would have increased an exemption for the 3 percent tax on equipment value up to $200,000.

The Republican-controlled Senate instead advanced a bill that would have provided even more tax relief on business equipment. Because of the tight fiscal situation and the bill's higher costs to the state, Zinke believes his measure had a better chance of clearing the process.

"I know my bill had a better shot because I coordinated it with the governor's office," Zinke said. "I thought that was important. He gets the last say. So if you got a bill that the governor's not going to sign, it's just a waste of time."

As a freshman lawmaker, Zinke said he was surprised at how political the process is. He said Republicans were successful in their insistence on having a $250 million ending fund balance and in holding the spending increase to 1.6 percent.

"We did what we could in a tight year," said Rep. Cheryl Steenson, D-Kalispell. "We stuck to some important issues for Democrats and we stuck with some important issues for Republicans."

Steenson said Democrats pressed hard to fund the Healthy Kids Initiative passed by voters last fall. The Legislature effectively raised the income eligibility threshold, allowing more families to qualify for the state's Child Health Insurance Program.

For Sonju, the problem with the CHIP expansion is that it didn't come with adequate sideboards to prevent the program from being exploited, such as an "asset test." As a result, families with lower incomes but high net assets can qualify for the program.

As a freshman legislator serving on the House Appropriations Committee, Steenson said she worked closely with Barkus to secure additional funding for Flathead Valley Community College.

FVCC will get an increase of about $2.6 million over current funding levels, Steenson said. The increase is temporary, however, and is intended mainly to help the school cope with the highest enrollment-rate increase at any Montana college or university.

And the Legislature approved the increase with the intent that it will allow the college to temporarily freeze tuition rates, Steenson said.

"In my opinion it was a great victory for the Flathead," said Steenson, a teacher at Glacier High School. "That was the most important work I think I did as a freshman legislator."

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