Circ activation contest

Governor pads budget with fund transfers

2010-11-17T00:00:00Z Governor pads budget with fund transfersBy CHARLES S. JOHNSON IR State Bureau Helena Independent Record
November 17, 2010 12:00 am  • 

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.”

Copyright 2015 Helena Independent Record. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(8) Comments

  1. The Big L
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    The Big L - November 17, 2010 5:44 pm
    Too bad some of those state employees lost their jobs for not agreeing to spending those earmarks.
  2. Independent
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    Independent - November 17, 2010 3:54 pm
    Judy Martz put money aside for wildfire fighting. Brian's memory is a bit off.
  3. nelliemade
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    nelliemade - November 17, 2010 2:35 pm
    Cutting out the fire fighting money? How has his governorship contributed to the low cost fire seasons of the last two years? It hasn't! It's strictly an environmental thing, and no one can predict what is going to happen in any given year, though many will try. So what is he going to do when all heck breaks lose and there's no money to pay for the fires when this state blows up?
  4. Mahalo_MT
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    Mahalo_MT - November 17, 2010 2:05 pm
    Cutting pensions? Why not limit legislator's service credit to actual time worked instead of time served. So instead of getting 2 years credit a legislator would get 3 months. It is a pure travisty that we have former legislators - now elected officials retiring with over 30 years of "service credit" when they only worked full time for the state for 8 years. Oh, and for what it's worth, their raises are mandated by law, not negotiated by a spineless union.
  5. bornNraised
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    bornNraised - November 17, 2010 12:01 pm
    It looks like the governor is intent on crippling the already decimated construction industry in Montana.

    Using the Bozeman tennis court as an excuse to hurt much needed infrastructure upgrades (water, sewer, transporation) is shameful.
  6. Bojangles
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    Bojangles - November 17, 2010 10:15 am
    At this stage, all state employees have the option to join the pension, or manage a portfolio more similar to a 401k.

    By the way - regarding the pension - the annual increase was halved for all employees hired post 2007. Halved!

    The pension is perhaps the best attractor of talent to state positions. Without it.. the State would have to actually start paying some of their employees - which would be harder to manage, a significant increase in pay, or the pension? Dunno.
  7. Ragnar52
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    Ragnar52 - November 17, 2010 10:11 am
    So the Governor would freeze any new Treasure State Endowment Program grants to communities for two years to help balance his budget? This is a new low, even for him. Since when are projects selected competitively according to statutory criteria “earmarks”? This is a critical program for local governments that was created with the support of 67% of Montana voters through a legislative referendum. And a dumb move, as well, for a state with high unemployment. With the leverage every TSEP project accomplishes (four dollars invested in local public works projects for very TSEP grant dollar), it has been a real boost to Montana’s economy and the creation of good paying construction jobs. This is very sad.

    The Governor says the stimulus grants for local public facilities awarded by the Legislature through HB 645 in 2009 gave the state "bad national press." Only because he generated it. He blasted communiies like Bozeman and Livingston in the state and national media for doing parks and recreation projects that were perfectly eligible under the law. It was the right of the local governments to set their own priorties for how the funds would be spent, as long as they met the eligibility criteria in HB 645. If he didn't like the list of eligible projects, he should have vetoed the bill. It will be a long two years before this egotist is finally gone.
  8. caribouboy
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    caribouboy - November 17, 2010 5:13 am
    I like Schweitzer but this sounds like a shell game. It doesn't sound like a budget that is good for the long term fiscal health of Montana.

    I'd suggest we cut out pensions for teachers and state employees and move them to 401K's like the rest of us Americans are on. Long term, there is almost nothing better that can be done for the fiscal health of Montana.

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