Week 12: State Budget Clears House, Lawmakers Consider Criminal Justice and Ag Bills

Montana House of Representatives Advances State Budget in Partisan Vote

The state budget cleared another major hurdle in the Montana Legislature after lawmakers in the House of Representatives passed it down party lines on Wednesday, March 24, with all 67 Republicans voting in favor and 33 Democrats against.

House Bill 2 determines how much money state agencies will receive from a pool of about $12.6 billion over the next two years. Passing a balanced state budget is the only task the Legislature is constitutionally required to do. But, the partisan divide in the final House vote reflects differences between spending priorities for the two parties following a floor debate that saw all amendments sponsored by Democrats defeated.

As it stands on its way to the Senate Finance and Claims Committee, HB 2 appropriates a projected $12.6 billion in state and federal funding to six different categories of state programs: General Government, which includes the Legislature, governor's office and Department of Revenue; the Department of Public Health and Human Services; Natural Resources and Transportation, which includes Fish, Wildlife and Parks, the Department of Environmental Quality and the Departments of Livestock and Agriculture; Corrections and Public Safety, including the judicial branch and the Department of Justice; and Education, which contains funding for public schools, the state library and more.

During a hearing in the House on March 20, Republicans and Democrats lauded the work done so far in assembling a budget deemed "a pretty good start" by Rep. Mary Caferro, D-Helena, who serves as vice chair on the Appropriations Committee. Debate remained cordial following spats in committees earlier in the session that led to a promise from House Majority Leader Sue Vinton, R-Billings that her caucus would "redouble our efforts" at civility.

Many of the changes proposed by Democrats during debate on the House floor targeted the budget for the Department of Public Health and Human Services, which oversees programs like Medicaid and addictive and mental health services. The budget passed by the House currently spends just over $6 billion on the department over the next two years -- $153 million less than proposed by Gov. Greg Gianforte.

Gianforte proposed a $23 million addiction recovery program in the department funded by incoming marijuana tax revenue, but the Legislature hasn't included that program in HB 2. Medicaid caseload estimates are also down more than $80 million in HB 2 compared to the governor's budget, meaning the Legislature expects fewer people to use Medicaid in the next two years.

Democrats proposed nearly a dozen amendments seeking to add back more than $23 million in spending from the General Fund, the state's primary "checking account." Republicans nearly uniformly rejected each one.

One amendment sponsored by Caferro would have restored continuous Medicaid eligibility to the budget. Under current law, people who register for Medicaid in Montana are automatically enrolled for a full year. If the budget passes in its current form and removes that provision, Medicaid users would be checked month-to-month to ensure they meet eligibility standards.

"We have cutting-edge policy in Medicaid expansion, and I, for one, am very proud of that policy," Caferro told House lawmakers. The amendment failed 33-67 down party lines as Republicans argued the program was too expensive and that only eligible Montanans should receive Medicaid on a monthly basis.

Another amendment introduced by Rep. Laurie Bishop, D-Livingston, sought to reinstate funding for the "STARS to Quality" program, which assesses preschool programs and offers incentives and guidance to help those programs improve. While Bishop argued the program helped provide quality and necessary childcare for Montana families, Rep. Matt Regier, R-Kalispell -- chair of the subcommittee in charge of the health budget -- said removing funding for the program would not stop the state from offering advice to preschool programs.

"This is about government subsidizing some and not others," Regier said. That amendment also failed 33-67.

Republicans successfully amended the bill and cut several one-time-only appropriations, some of which they said would be restored through federal money pouring into the state from the American Rescue Plan Act signed by President Biden earlier in March. One successful amendment cut $120,000 from the state library's budget intended to fund the National Federation of the Blind Newsline, a free online audio news service for people who are blind. Amendment sponsor Rep. David Bedey, R-Hamilton, assured lawmakers that the program would be funded by federal relief money.

The House Appropriations Committee, chaired by longtime state budget guru Rep. Llew Jones, R-Conrad, spent the first half of the session assembling the budget proposal in subcommittees comprised of members of the House and the Senate. Republican Gov. Greg Gianforte proposed his ideal budget to the Legislature before the session began and promised that it would "hold the line" on new state spending compared to the budget proposed by his predecessor, former Gov. Steve Bullock. Conservatives in the Legislature have chased that goal, with the current budget coming in 1.2 percent smaller than Gianforte's proposal -- though with a 3.4 percent increase overall compared to the previous state budget passed in 2019.

In a press call held after the House approved the budget, Democrats said they voted against the bill because they felt it wasn't in the shape it needed to be, citing cuts made by Republicans to Medicaid caseload, mental health programs in schools and senior health care programs.

"If you put a good budget forward, you'll get bipartisan support," Caferro said. "This is not a good budget."

Democrats also expressed concern about cutting programs from the state budget while promising to fund them from the pool of federal relief money. Gov. Gianforte's budget director Kurt Alme previously warned the Appropriations Committee against funding any long-term programs with the one-time-only funds from the American Rescue Plan.

"I'm not sure why we're filling those in with ARPA [funds]," said House Minority Leader Kim Abbott, D-Helena. "This money goes away in four years, and these are programs and services that we should be funding over the long run."

House Republicans expressed satisfaction with the current state of the budget, with Speaker of the House Wylie Galt, R-Martinsdale, touting it as a "conservative" budget in a press release.

"House Bill 2 provides the state with a responsible budget that adequately funds state services and gives Governor Gianforte the tools he needs to continue making state government more efficient," Galt said.

At the end of the House debate on HB 2, Jones thanked members for their hard work in and out of committee in assembling the budget, which he called "a heavy lift."

"Money is always scarce, so our funding decisions pick the winners and losers and the services we can afford to provide, and this is difficult," Jones said. "This is a very well-thought-out bill for this point in time. It's time for it to go to the Senate side."

The next step for the budget is hearings in the Senate Finance and Claims Committee.

Bill Would Establish State Reimbursement Fund for Wrongfully Convicted

Montana has exonerated 15 people imprisoned for crimes they did not commit since 1989, according to the National Registry of Exonerations. Now, a Senate committee is considering a bill that would establish a program to compensate those individuals.

House Bill 92, sponsored by Rep. Kathy Kelker, D-Billings, would grant exonerated Montanans $60,000 per year of their wrongful imprisonment and $25,000 per year of their parole. The House passed the bill on an 88-11 vote in late February.

During a hearing in the Senate Judiciary Committee on Tuesday, March 23, Kelker said the bill is the result of lengthy conversations in a House committee on law and justice that met between legislative sessions. She and the bill's proponents said the new fund would help the state avoid costly lawsuits by offering compensation to exonerated Montanans outright. HB 92 contains a clause that would require an individual to pay the state back the money they receive from the fund if they choose to file a lawsuit for wrongful conviction instead.

The bill drew no opposition in its Senate hearing while support piled on from freedom-focused groups and one man who was falsely convicted of a crime and spent time in and out of prison for 14 years as a result. Cody Marble's name was finally cleared in 2018 after he was imprisoned on false charges of rape as a teenager. He told the committee that previous attempts by the state to help exonerated Montanans get back on their feet fell short, and that this bill would be a critical step forward.

"It's time for Montana to deliver economic justice to those it's wrongfully imprisoned," Marble said.

Patrick Webb spoke in favor of the measure on behalf of Libertarian political group Americans for Prosperity. He said the state needs to provide proper compensation for the newly exonerated, as they're currently being "sent on their way with nothing" following their release from prison.

"It is the absolute duty of the state to right this wrong and make these individuals whole," Webb said. "While we can never hope to make right the loss of the individual's liberty, monetary compensation is something we can provide to give these individuals hope and a path forward."

Kelker told the committee she was preparing a pair of amendments to correct changes made to the bill in the House Appropriations Committee that she thought did not align with the goal of the bill. One change raised the bar for evidence of innocence a claimant would have to provide to a court to qualify for compensation from a "preponderance" to "clear and convincing." Kelker said the change constructed an unnecessarily high barrier to accessing the fund.

"In the petition the claimant would make, they don't have to prove their innocence again, because that's already been proved in another setting," Kelker said.

Senate Judiciary Committee Chair Keith Regier, R-Kalispell, asked a witness if there had been any consideration of adding a section to the bill to ensure accountability for the people responsible for a wrongful conviction. In her closing remarks, Kelker said she'd considered that aspect and thought it was important, but said it deserves a bill of its own.

"This bill has had a long journey, but it's time to get it done," Kelker said.

"Farm-to-School" Grant Program Bill Draws Acclaim from Farmers, Ranchers and Schools

A bill to help fund "farm-to-school" local food programs garnered widespread support and no opposition during an initial hearing in the Montana House Education Committee after proponents said the programs would benefit both farmers and students.

House Bill 642, sponsored by Rep. Laurie Bishop, D-Livingston, would establish a statewide pilot program providing farm-to-school implementation grants for schools interested in purchasing locally-produced food, expanding agriculture education and tending school gardens. If the bill passes, it would appropriate $100,000 from the state's general fund to help interested schools offset the increased cost associated with buying from local producers.

"It is a love for the farm-to-school program in my own community that leads me to bring you House Bill 642," Bishop told the committee during the bill's first hearing on Wednesday, March 24. "Park County Farm to School" -- operating in the district Bishop represents -- was founded in 2008, according to their website. The program helps schools purchase local produce, manage school gardens, and educate students on the elements of healthy living.

Bishop said the Park County program has met great success, and told the committee that many school districts around the state were interested in starting farm-to-school programs of their own, but needed a financial boost from the state to get there.

The Office of Public Instruction would administer the grant program, which would award funds based on proposed farm-to-school programs that are "well-designed," and include dietary, educational and inclusive components. The bill stipulates that preference be shown to programs that enroll at least 50 percent of students who receive free and reduced-price meals.

"This is a great gateway to so many of the things we want our kids to learn about," Bishop said.

More than a dozen people testified in favor of the bill, including agriculture organizations, parents, farm-to-school program managers, students and private citizens who said farm-to-school programs benefit all parties involved.

Rep. Jane Gillette, R-Bozeman, spoke in support of the bill, saying that she's seen firsthand the benefits of farm-to-school programs, but knows that only the top one percent of schools seem to "figure it out." Gillette said the bill would help schools that are less financially flexible to "make that leap" into their own farm-to-school programs.

"These visionary programs really enhance the children's lives as they understand where their food comes from, and the agricultural business side of it as well," Gillette said.

Students from Livingston's East Side Elementary School testified in support of the bill, saying they'd had ranchers come into their classrooms and teach them about the beef they ate in their lunches. One said he loved having class out in the school garden.

Cole Mannix spoke on behalf of the Grow Montana Food Policy Coalition in support of the bill and said establishing more farm-to-school programs would help boost Montana students' nutrition and get them "out of the classroom and out of their comfort zones" learning about how their food is produced.

"To me, this is about powerful, experiential education and a rural-urban exchange that's hard to do without getting kids out and meeting the people who produce their food," Mannix said.

Many committee members expressed their excitement for the bill, though Rep. Brandon Ler, R-Savage, said he was worried the bill's $100,000 appropriation wouldn't be effective in establishing farm-to-school programs. Bishop said the grant program was just a trial to prove a larger program could work, and that schools only needed help covering the additional cost of budgeting for local food.

"Obviously this could be a big thing for our farmers and ranchers, but at the end of the day, it's for the kids," Bishop said.

Gov. Gianforte's Tax Bills Hit Bumps in Montana Legislature

The Montana House of Representatives nearly killed a tax relief bill from Gov. Greg Gianforte last week before voting to reconsider their move.

Gianforte introduced several bills in the 67th Legislative Session as part of his "Montana Comeback Plan," promising cuts in personal income tax and business equipment tax, as well as tax credits for trade education and a plan to levy the capital gains tax at a single rate. But some of his plans are derailing, with a committee proposing cutting the top income tax rate even further and the "Entrepreneur Magnate Act" nearly going down on the House floor.

Senate Bill 184, sponsored by Senate President Mark Blasdel, R-Kalispell, seeks to eliminate a state tax on capital gains from the sale of a corporation's stock. Gianforte has previously said the bill is designed to attract investors and businesses to Montana, but when the full House heard the bill on March 25, some lawmakers didn't see it that way.

House Minority Leader Kim Abbott, D-Helena, said the bill would benefit out-of-state investors, rather than existing Montana businesses.

"The thing that worries me about it is, if it does work, I think that it creates a pretty big fiscal impact, potentially," Abbott said. "But we don't know if it will work or not."

Rep. Barry Usher, a Republican representing parts of Musselshell and Yellowstone County, raised concerns that the bill would incentivize large marijuana corporations into Montana now that the state has legalized the use and sale of recreational weed.

"I'm not sure that I can vote for a bill that's going to entice large marijuana companies to come to Montana. Whether you agree with the marijuana coming or not, I don't want to see these big marijuana companies coming to Montana," Usher said.

Following Usher's dissent, the House voted narrowly to defeat the bill 49-51. But before the meeting adjourned, Rep. Derek Skees, R-Kalispell, made a motion to reconsider SB 184.

"I think there's some additional information to this bill that was not discussed on the floor, and I think we need to continue to discuss it," Skees said. That motion passed 67-33.

Earlier in March, the House Taxation Committee made a surprise amendment to Gianforte's income tax relief bill -- Senate Bill 159 -- which originally sought to cut the top income tax rate from 6.9 percent to 6.75 percent. The amendment came from Rep. Rhonda Knudsen, R-Culbertson, and reduced that rate to 6.5 percent, more than doubling the price tag on the bill in lost revenue from $30 million per year by 2025 to more than $80 million.

Knudsen said she asked the governor to make the change in order to provide greater annual savings for the middle income earners in her district that make up the majority of her constituency.

"We're going to run the 6.5 percent and see if we can make that tax savings a little bit stronger for those families back home," Knudsen told the committee.

Democrats on the committee cautioned against deepening the tax cut and reducing state revenue in light of the financial turmoil brought by the COVID-19 pandemic.

"The thing is, this is a very, very expensive method to better reach the regular folks as you're describing," said Rep. Dave Fern, D-Whitefish. As of Friday, March 26, the committee had not yet voted on whether to advance the bill to the full House.

Another Gianforte tax bill, Senate Bill 181, was tabled in the Senate Taxation Committee on March 25. The bill proposed a "modernization" of the corporate income tax and would have helped generate some of the revenue lost in his other tax reduction bills. The governor is trying again with Senate Bill 376, which the committee approved 7-4 on the same day it killed the previous measure. The new version, however, cuts a portion of SB 181 that called for higher corporate income tax, reducing revenue generated by the bill from $15 million per year to just over $3 million, the Montana Free Press reported.

Most Democrat tax reform bills have been defeated so far, including one from Rep. Jim Hamilton, D-Bozeman. He sponsored a number of Democrat-supported tax bills, one of which drew support from the Montana Chamber of Commerce and Big Sky Economic Development and no opponents during its first hearing. House Bill 650 would have allowed investors to claim up to $75,000 per year in tax credits for cash investing in Montana businesses from 2022 to 2029. The House Taxation Committee tabled the bill.

However, the House approved House Bill 629, sponsored by Fern, on a bipartisan 71-29 vote on March 26. That bill would create an income tax credit for businesses that generate at least 5 new jobs per year in counties with less than 20,000 residents and 10 new jobs for businesses in larger counties.

Montana Legislature Considers Housing Adults in Youth Correctional Facility

A bill that would allow adults to be housed with youth at a correctional facility in eastern Montana drew criticism Friday from opponents who said it could open up that option at other facilities.

The Pine Hills Youth Correctional Facility in Miles City currently holds 23 youth inmates, with room for 126. Senate Bill 344, sponsored by Sen. Kenneth Bogner, R-Miles City, would allow adult inmates to fill the spots. The bill cleared the Senate on a 27-22 vote in early March during a marathon floor session before the Legislature adjourned for a mid-session break.

Bogner and several proponents said at a House committee hearing for the bill on Friday that the current way the Department of Corrections houses inmates is "not efficient," pointing to the empty space in Pine Hills as an opportunity to make better use of state resources by filling empty spots with adult inmates.

The Department of Corrections and the current superintendent of Pine Hills both testified in support of the bill, echoing Bogner's idea for greater efficiency.

"We want to most efficiently use our resources, and it doesn't make a lot of sense to run a facility of that capacity with 23 [youth offenders]," said Department of Corrections Deputy Director Cynthia Wolken.

Wolken said adults would be properly separated "by sight and sound" from the youth at the facility, which houses all males.

Opponents, including Beth Brenneman of Disability Rights Montana, said the bill grants the department too much power without oversight. Brenneman added that the bill went further than a previous measure from 2017, allowing adults of any age to be housed in youth facilities. The 2017 bill, which the Legislature killed, would have allowed offenders age 19 and 20 to be housed at Pine Hills.

"This really is about decision making that should be part of an interim study as opposed to a 61-page bill that they want you to say 'yes' or 'no' about," Brenneman said.

If the House Judiciary Committee approves the bill, it will head to the full House for additional debate.

Austin Amestoy is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation. He can be reached at [email protected].