Gov. Brian Schweitzer’s proposed budget relies heavily on $95 million worth of transfers of money from other funds to beef up the general fund to balance his state spending plan for the next two years.
The transfers are critical for his general-fund budget, which calls for leaving a $129 million ending-fund balance or surplus as of mid-2013. Without the transfers, that would leave a budget with a surplus of only $34 million by mid-2013.
One of Schweitzer’s major proposals would make a one-time transfer to the state general fund of the remaining $18.5 million left in the Treasure State Endowment Program. It would be a one-time only transfer.
This program, funded with coal-tax revenues, has provided state grants to local governments for public works projects.
“We have earmark fatigue in this country and in Montana,” Schweitzer said in an interview.
In 2009, he said, the state had TSEP money and federal stimulus money from House Bill 645 targeted to local governments and school districts.
“We ran out of good projects and started building rubber-tiled tennis courts and a climbing wall and got bad national press,” he said, referring to Bozeman projects.
Schweitzer said he agrees with President Barack Obama and those members of Congress who believe federal earmarks should be suspended. He said he wants to do the same with state earmarks.
“The earmark system has been a way to bribe people with their own money,” he said.
All of his proposed transfers would require legislative approval when it considers his budget proposals.
He also proposed transferring $4.9 million from the regional water system special revenue account to the general fund for the biennium.
Harold Blattie, executive director of the Montana Association of counties, said Schweitzer’s proposal could wind up delaying many local projects by a couple of years.
“The local communities rely heavily on the TSEP and the water program for local infrastructure the communities would be very hard pressed to fund without those resources,” Blattie said.
Here are some of Schweitzer’s other proposed transfers:
- Long Range Building Program. Schweitzer is proposing eliminating and transferring to the general fund $10.7 million in projects he already ordered canceled as part of his austerity measures earlier this year.
“It’s just good fiscal management,” he said. “When you’re in the lean years, you just fix the fences and keep the cattle in. You don’t build a new barn.”
- Long Range Information Technology. He called for transferring to the general fund $10.7 million in information technology projects. He announced their cancellation earlier this year.
- Fire Suppression Account. Schweitzer proposed transferring $20 million from the fire suppression fund to the general fund and moving transferring the unspent balance of his $16 million governor’s emergency appropriation at the end of each two-year budget period to the fire suppression fund.
“I am the first administration in history to put money aside for fires,” Schweitzer said. “We managed through the last biennium of without spending a lot on fires. We will redeploy it to the general fund and take it back to $16 million.”
Previously, the Legislature paid the fire bills as a supplemental appropriation.
- Big Sky Economic Development Fund. Schweitzer called for transferring $2.89 million from this fund to the general fund.
- School Facility Account. He would move $20 million from the school facility account into the state general fund. This is money that PPL and Avista pay for as rent for use of the state’s streambeds, Budget Director David Ewer said.
- Coal Bed Methane Account. The governor’s proposal would transfer $6 million from this account into the general fund.
- Natural Resource Damage Account. This would transfer $1.3 million into the general fund.
Another Schweitzer proposal, which would require legislation, would reduce the local government entitlement share inflation to 0.76 percent, the same rate that public school districts will receive. Local governments were expected to see about a 4 percent increase.
This proposal would save the state general fund $10.6 million, the budget office said.
In response, MACO’s Blattie said, “I’m disappointed because local governments were not there asking for a higher rate of inflation when the state revenues were increasing rapidly. So we don’t think it’s really equitable to ask us to have a reduction in it now that the state revenues have turned not so well.”