A pragmatic budget proposal

Montana Gov. Brian Schweitzer appears to have stepped cleverly in the right direction with the state budget draft he introduced this week.

Schweitzer described his proposed budget as “pro-job, pro-family and pro-growth,” most notably because it includes provisions to eliminate the business equipment tax for all but the largest companies as well as providing $36 million in income-tax credits for homeowners.

Considering that Republicans have taken one of the largest governing majorities in state history with a 68-32 lead in the House and a 28-22 advantage in the Senate, the state’s Democratic governor made a pragmatic move in offering up tax cuts.

GOP lawmakers have long clamored for eliminating the business equipment tax, regarded as a nuisance because it is levied regardless of whether a business suffered losses or not in a given year.

The new Republican leadership in the Legislature is pledging to push for less government and spending, and Schweitzer’s budget takes steps in that direction as well. It calls for cuts in the Department of Transportation, the Department of Commerce and the Department of Labor, for instance.

It’s hard to predict what budgetary battles will unfold as the legislative session gets under way in January — they always crop up, particularly in tight times.

For starters, Republicans are already scrutinizing a disparity in revenue projections over the next two years. The governor’s office is projecting about $60 million more in revenue than the Legislative Fiscal Division.

Schweitzer has called for an overall general fund spending increase of 2 percent. Much of that can be accounted for with proposals to boost K-12 education spending by $50 million and higher education by $39 million.

But will that be enough? Or will there be pushback against proposed tax cuts in order to boost spending in some programs? We will wait and see.

The governor’s budget relies heavily on transferring about $95 million from a variety of special funds to the general fund. That tactic may be met with objections. In particular, a one-time transfer of $18.5 million remaining in the Treasure State Endowment Program, which has provided grants to local governments for public works projects, may not be well-received in some quarters.

There are other areas of the budget that may raise some dust, too. Will it, for instance, go far enough in addressing the state’s pension fund obligations? The devil is always in the details when the legislative session winds to an end. But at least it looks like the governor has made a good-faith effort to keep the state in the black.