The state of Montana could see hundreds of government jobs eliminated, safety in jails and prisons diminished, and even a reduction in the state’s ability to collect the taxes that keep it operating under plans to cut spending because of lower-than-projected revenue.
Documents submitted by state agencies and released Friday detail the 10 percent budget cuts called for by Gov. Steve Bullock’s office in an effort to trim at least $226 million in state spending over the next two years.
The cuts are necessary because of lower-than-expected state revenues due to low income tax collections, which are down about $70 million from what was projected. There has also been a reduction in tax revenue from natural resource extraction, and the state is experiencing high expenses fighting wildfires that have torched more than 1 million acres so far this summer, with several major fires still burning.
Montana’s Constitution does not allow the state to operate in the red and gives the governor authority to make mid-year reductions. The state has to have an ending fund balance, or cash in the bank, of $143 million at the end of fiscal year 2019.
The cuts proposed Friday are not final. Two legislative committees will make recommendations on how to cut spending, and starting Sept. 26, Bullock will start an agency-by-agency review. He has the discretion to decide which cuts are made.
“Some very tough decisions are going to be made over the coming weeks and months as I work to responsibly balance our budget,” Bullock said in an emailed press release Friday. “I remain hopeful that the legislature will work with me during this process to identify more responsible solutions to deliver a balanced budget that does not substantially impact education, healthcare, child protective services and public safety.”
Unless a special session of the Legislature occurs, the decision on the cuts will fall to Bullock.
This round of cuts comes on top of a 5 percent reduction across most of the state government implemented by the Legislature this spring. That was followed by another $70 million in cuts triggered when revenue came in lower than projected. Those cuts halved the state’s fire fund, which is now empty, and resulted in 20 people losing jobs, mostly at the Montana Historical Society and the State Library.
The Department of Public Health and Human Services already reduced services to children in foster care, the elderly and disabled and is trying to cut rates Medicaid providers are reimbursed by 3.47 percent.
That department, the biggest in state government, is also the hardest-hit agency under the proposed cuts released Friday. Bullock asked the department to cut $105 million more in spending over the next two years, including in senior and long-term care, child protection services and addictive and mental disorder programs.
While every state agency will be impacted, 85 percent of the state’s general fund budget is dedicated to the Department of Corrections, the Department of Public Health and Human Services and the primary, secondary and higher education systems.
"To say this has been difficult is a tremendous understatement," health department director Sheila Hogan said in an emailed statement. "We will do the best we can to minimize the impact on Montanans as much as possible, but we remain hopeful the legislature will work with the governor to find more responsible solutions."
Documents released by the state after 5 p.m. on Friday detail more than 110 pages of cuts, with varying degrees of clarity as to which divisions and programs in the health department would be affected. Officials were not available to offer clarification on unclear proposals.
Some health department programs, such as a federal entitlement program that helps infants with disabilities, appears to be cut entirely. Other divisions would see furloughs in staff hours and layoffs, though it wasn’t clear exactly how many jobs would be lost.
High-cost dental procedures for 44,774 adult Medicaid patients would no longer be covered. Operating costs at Montana State Hospital would be cut by $2.2 million over two years. Earlier this year, the hospital almost lost its federal funding because of unsafe conditions caused in part by a shortage of staff.
The Department of Corrections will lay off numerous employees, which it said will make conditions worse for inmates, possibly risk public safety and open the state up to several lawsuits. It would cut up to $40 million over two years under its proposal.
"Unfortunately, there are no good options for such significant cuts," director Reginald Michael said in a statement. "We hope that throughout this process we can identify more responsible solutions to this situation, but for now we'll keep making public safety decisions in the best interest of Montanans."
Cuts will mean already overflowing county jails will continue to hold state prisoners. Reducing that burden was a major part of corrections-related discussions during the last session of the Legislature, with some advocacy groups discussing potential lawsuits if county jail populations did not come down.
The cuts are deep enough to even limit the batteries parole and probation staff buy to use in their radios. If batteries die during shifts, that could put their safty at risk. The department would also not be able to replace broken cameras at Montana State Prison for two to three months.
The infirmary in Lewistown would also be closed, leaving 25 inmates without access to nursing home care. Medical costs and equipment would still need to be provided at the Montana State Prison.
The Office of the Public Defender would no longer use contract attorneys, who handle a significant amount of cases. That may cause legal issues by denying people a right to a speedy trial and "disruption to the judicial system," the agency said.
Cuts to the Office of the Commissioner of Higher Education would reduce state financial aid available to Montana College students. Reductions to resources for maintaining federal grant programs could jeopardize a $5.4 million annual Carl D. Perkins Grant. Public service and research agencies attached to Montana State University and the University of Montana will face cuts.
The state university system must identify a total of $44 million in spending reductions. State lawmakers already slashed the Office of the Commissioner of Higher Education's budget in the 2018-2019 state budget passed in April.
Those previous cuts left a $19 million shortfall that resulted in tuition hikes, and Deputy Commissioner Tyler Trevor said tuition may have to go up again. It will be up to the Board of Regents to approve the cuts and tuition hikes, Trevor said.
"They all will have the ability to weather the storm, it's just a matter of the tactics we take," Trevor said of the state's colleges and universities.
At the Department of Justice, 10 percent cuts would mean closing a satellite lab in Billings, as well as scrapping plans to build a morgue there. Both were considered a huge improvement in dealing with an influx of drugs and crime in that region that came with a boom in the Bakken oilfields in Eastern Montana. The department also predicted the change would result in the departure of the state medical examiner because it’s difficult to recruit that job under current conditions.
The Motor Vehicle Division would leave vacant positions unfilled, resulting in increased wait times for customers.
“The plan we submitted represents the worst case scenario, if required to cut the full ten percent of general fund dollars from our budget,” Eric Sell, a spokesman for the department, said in a statement. “If these cuts go into effect, it will clearly have a negative impact on the services we provide to the people of Montana.”
The Office of Public Instruction would cut $5.8 million over two years in local assistance to districts, a move the office said would have "severe" impacts since districts have already budgeted for that amount and can't get money elsewhere.
It would also implement a hiring freeze and put additional restrictions on travel and attending conferences. "The impact of this reduction will significantly alter the way OPI provides services to Montana schools and students," the department wrote in its plan.
The Department of Revenue pointed out by cutting its budget, the state would have less ability to collect revenue and disperse it to state, local and tribal governments. An estimated 116 full-time equivalent positions would be cut over two years, many from the property assessment and business income taxes divisions.
That will "severely impact the security, efficiency and effectiveness of the department's tax administration, thereby negatively impacting the state's general fund, school funding and local government funding," the department wrote.
Montanans can comment on the proposed cuts at http://balancedbudget.mt.gov/.
The Associated Press contributed to this story.