Drop the $400 rebate; get serious

It is encouraging that Montana Gov. Steve Bullock has offered up a budget that will not raise taxes. Indeed there are tax cuts, and the proposal leave the states with a healthy planned surplus.

Nonetheless, our new governor’s first budget will get deserved scrutiny for provisions that would increase spending by 13 percent over the next two years.

Counted as “spending” in the budget is Bullock’s proposal to give homeowners a one-time $400 rebate for property taxes. It is really more of a political gesture (payback?) than a policy direction designed to accomplish anything of consequence. Some form of permanent property tax relief would be far more preferable even if it were modest.

Montanans have seen this movie before when former Gov. Brian Schweitzer did the same thing with no measurable effect in stimulating the state’s economy. Face it, $400 isn’t a lot of money for many people who can afford homes. That amount would be far more significant for people who rent, but they won’t get anything.

Ultimately, taxpayers should be far more concerned about the sustainability of Bullock’s budget proposals that are related to uncertain federal funding in the future.

Republican lawmakers, who have majorities in the House and Senate, have been justifiably questioning the wisdom of Bullock’s proposal to expand Medicaid spending by $750 million. The federal Affordable Care Act is expected to pick up the tab initially, but what about a few years down the road?

If Congress and the Obama administration ever get around to spending cuts and entitlement reforms, the federal funding spigot will suddenly lose pressure, potentially leaving states high and dry.

State lawmakers should be counting on less federal largesse in the future, and plan accordingly. In Montana’s case, it is fortunate that power is divided in Helena.

One Republican legislative leader recently acknowledged that the state probably will have to move ahead with some spending increases. There seems to be bipartisan support for freezing college tuition, for shoring up the state’s pension funds and increasing pay for state employees.

But a 13 percent spending increase is hard to imagine in these tough times, so there will eventually be some fiscal fireworks in the state Capitol.

Editorials represent the majority opinion of the Daily Inter Lake’s editorial board.