Montana revenue shortfall triggers worst-case budget cuts

by Bobby Caina Calvan
| July 25, 2017 2:27 PM

HELENA — Montana revenues have fallen far enough below projections to trigger a worst-case scenario — $97 million in spending cuts across state government starting as soon as next month — Gov. Steve Bullock’s budget director said Tuesday.

Schools and health programs will receive the brunt of the cuts. The Office of Public Instruction is losing at least $6.6 million over two years, while the Department of Public Health and Human Services will have to cut at least $14 million.

In addition, $30 million will be transferred out of the reserve fund used to pay the cost of fighting wildfires, even with more fires burning in Montana than in any other state. At least $30 million will remain in the fund, which state officials project will be enough to cover firefighting costs.

A law signed by Gov. Steve Bullock earlier this year establishes four tiers of spending cuts, depending on the amount of money the state takes in compared to the revenue forecast. The final numbers show the shortfall was large enough to trigger all four levels of cuts.

That means funding will be eliminated for state employee raises, payments will be cut for direct care workers for the elderly and disabled and some aid to public schools will be slashed. Layoffs are expected at some agencies, like the Montana Historical Society, which is expected to lose $600,000.

Most state agencies will have to reduce their budgets by a half-percentage point, with others requiring deeper cuts. Cuts are also planned for promoting tourism and agriculture in Montana, and the state’s contract with Blue Cross and Blue Shield of Montana to run its Medicaid expansion program will be terminated.

The Republican-led Montana Legislature passed a budget earlier this year based on revenue coming in at $2.2 billion. Democratic lawmakers and Villa warned that revenue estimate was too high compared to the governor’s projections, but Bullock signed into law the two-year budget and the separate bill that set the revenue triggers for the cuts.