Budget, Taxes, Education and Social Issues Likely to Dominate Legislature's Second Half

The 68th Montana Legislature, with an unprecedented Republican supermajority, is halfway through its 90-day session and the next 45 days promise to be dominated by debates over the state's two-year budget, which funds everything from schools to Medicaid payments to nursing homes and mental health providers.

As Republicans vie for tax cuts that they say put money back in Montanans' pockets, Democrats fight to invest in long-term planning, all while sitting on another unprecedented factor: a $2.5 billion surplus.

Jessi Bennion is a professor of political science at Montana State University and Carroll College. She said there are many things that stick out this session as being out of the ordinary -- notably the surplus and the Republican supermajority. She also said there's been a far larger number of bills proposed this session than sessions previous -- something that she attributes to the Republican trifecta of controlling both houses of the Legislature and the governor's office.

"Republicans were very, very successful in Montana in this last election, and have been for at least a decade in this state," Bennion said. "They're acting like they have that mandate from the people. And so we're seeing a lot of ideas, bills, come forth that can only really be explained because they hold that power."

She said the Republican supermajority changed the rules of the game, so to speak. The Republican party has the ability to push whatever they want forward while Democrats will have to compromise to move their policy forward. Bennion anticipates that's what the second half of the session might be about -- whittling the bills down until it works for both parties.

"They will do a lot of strategizing, finding compromises until they can pass those bills," Bennion said.

Constitutionally, the Legislature only has one assignment and that's to pass a balanced budget. During the first half of the session, joint subcommittees hammered out each section of House Bill 2, the main budget bill. After all of that, in its current form, HB 2 authorizes more than $13 billion in spending over the next two years. Now, the House Appropriation Committee is working through the document piece by piece -- amending, reallocating and compromising until they reach their final agreement. The legislative budget is slightly lower than Republican Gov. Greg Gianforte's budget proposal. Representatives on the committee aim to vote on the budget and move it to the full House for debate this week.

When lawmakers reconvened on Feb. 9 after their mid-session break, the House Appropriations Committee started hearings on the entire budget, starting with the largest section, Section B, which funds health and human services in the state, including the state Medicaid program, foster care and mental and behavioral health services. That section alone would spend about $7 billion of state and federal funding over the next two years. Medicaid provides healthcare for low-income Montanans and the state's reimbursement to Medicaid providers will be a big part of the budget debate in the second half of the session.

Other hot topic issues in the second half of the session will have to do with taxes, education and social issues.

The Republican caucus kicked off the legislative session with a hefty expectation of using the $2.5 billion surplus to give tax money back to the people of Montana in the form of tax cuts and rebates.

The party will come into the second half divided on spending the remaining $1.5 billion of the surplus.

The $950 million already spent by the legislature is a product of what is known as the "eight pack" which includes: House Bill 192, which spends $480 million on property and income tax rebates, House Bill 222, which spends $280 million on property tax rebates, House Bill 267, which would put $100 million into the state's highway fund, and House Bill 251, which would allocate $125 million to paying off the state's debts.

Senate Majority Leader, Steve Fitzpatrick, R-Great Falls, said with the remaining surplus in the second half of the session, the debate on how to spend it will fall between aligned factions.

"You've got a group of Republicans who want to do more ... rebates. You've got Democrats who want to have almost all social spending, and then you've got kind of a mix in the middle and that's going to be the negotiation," Fitzpatrick said.

Fitzpatrick said before the halfway mark, several bills in the governor's package were killed by groups of Democrats and conservative Republicans, but the two do not have common ground and are doing it for different reasons. House Bill 268, which would create a $1,200 child tax credit passed a second reading vote in the House 77-21, but was tabled in the House Appropriations Committee. House Bill 269 , which would create a local disaster resiliency fund also passed second reading in the House 89-11, but was tabled in the committee 16-7.

"The hardcore conservatives are doing it because they want more rebates. The Democrats are doing it in order to try and increase their leverage in the process by denying votes to the more moderate Republicans," Fitzpatrick said.

Fitzpatrick said not all the money in the surplus can be allocated to tax cuts and the Legislature also has to look at appropriating money into areas that need more spending.

Democrats have a different idea on taxation than the majority party. They see the surplus as an opportunity to invest in Montana's future. They want to invest a sizable chunk of the surplus into Montana's coal trust, an account that holds money taxed on natural resources collected in the state.

Days before the transmittal deadline the Senate Local Government Committee tabled Senate Bill 346, 6-3 on a party-line vote. Sen. Ryan Lynch, D-Butte was sponsoring the bill, which would have moved $2 billion of the surplus into the coal trust.

Democrats now shift their aim to House Bill 2 and as the fight over how to divide the surplus up continues, leaders say the caucus is growing increasingly concerned with their ability to find a compromise that will satisfy both parties.

"We have a generational opportunity right now to invest in real problems in our communities, in childcare, affordable housing and things that we're hearing from businesses every day, from families every day that are real issues in their communities and, for permanent property tax relief, which the GOP refuses to consider seriously." House Minority Leader Kim Abbott, D-Helena, said at a press conference at the session's halfway mark.

While taxation and the budget is the biggest focus of the Legislature in the second half, other topics, including education and social issues will be standing not far behind.

Republicans and Democrats have found common ground when it comes to education throughout the session on bills like Sen. Shannon O'Brien's, D-Missoula, Senate Bill 8, which would update personalized learning programs across the state. However, the two parties are still far apart when it comes to other issues.

Republicans want to give parents more rights in their child's education, while also setting up more trade school opportunities. Democrats are focused on teacher pay, especially in rural Montana and especially with the increased cost of living.

However, beyond basic law making and bill passing, there is also a philosophical battle brewing over education.

One of those arguments is between Rep. Sue Vinton's, R-Billings, House Bill 562 and Rep. Fred Anderson's, R-Great Falls, House Bill 549 regarding the implementation of charter schools in the state.

"There's different views on charter schools, you have some people that believe in a more private model where you give money to a private organization and run a school, and then there's a group of people that believe that the community charter schools need to be publicly operated and oriented," Fitzpatrick said.

Fitzpatrick said the conservative viewpoint would be to have private entities competing with public schools.

"The theory, if you go read Milton Friedman, is that competition will result in better results. He believes that in education you will get better results through competition between government and private entities," Fitzpatrick said.

A few solutions have been tossed around the Capitol this session. Both parties are interested in further subsidizing the cost of public education through tax mill levies and improving teachers' salaries to incentivize more young Montanans entering the profession to move to rural places.

Senate Bill 70, sponsored by Democratic Senator Shannon O'Brien is aimed at solving the teacher shortage with student loan pay-off incentives. It passed the Senate 46-4 on Feb. 3.

But the argument over charter schools is still heated.

Amanda Curtis, the president of the Montana Federation of Public Employees. She said a charter program could cause issues to equal access to education in Montana, which could ultimately end up costing Montana more in the long run.

"If you chart this course out, you can predict that it will end up being an increased cost to the taxpayer because they do have an obligation to adequately fund a free quality public education for every kid," Curtis said. "And so if they're going to defund that system to create private charter schools, we're going to sue and win. And they're going to have to put more money into the public education system. Which then, I mean, that gets paid for by the taxpayer."

The 68th Legislature is also considering a groundbreaking number of social issue bills, including on controversial topics like transgender rights, access to abortion and what responsibilities medical professionals have, or don't have, in providing care in those cases.

House Bill 303, which would allow doctors to object to providing services that go against their beliefs, like gender affirming care or abortion services, passed the House 63-33 and now moves to the Senate for debate. Senate Bill 154, which would exclude abortion from the right to privacy in Montana, passed the Senate 28-21 and will now be up for debate in the House.

Leaders in the Republican caucus say they are concerned with outside pressures that could affect children in the state -- especially surrounding gender identity.

"Kids need to be kids. Our children should be focused on the big sporting events and how to pass the algebra class.They should not be worried about how to deal with them, or the pressures of the left to subtly or even overtly be sexualized," Rep. Matt Regier, R-Kalispell said.

Another bill in that vein is House Bill 349, which would prohibit minors from attending drag shows. It is now in the Senate after passing the House 61-37.

Shawn Reagor works for the Human Rights Network of Montana and has spoken out in opposition against such bills. He said these bills are often "adopted" from other states that have passed similar legislation. He said this legislation has more impact on Montanans beyond preventing them from accessing the medical services they need.

"It's not just attacking the ability to have drag shows. It's putting out a message that LGBT people should not be around children or something that is an essential part of our culture is unacceptable or is becoming -- or they're branding it, for example, as harmful when the reality is we know that that's just not the truth," Reagor said. "So as part of that fallout and the impact of that rhetoric is that, you know, we see an increase in rates of discrimination. We see an increase in harmful language, we see an increase in violence and anti-LGBT rhetoric."

Caven Wade and Elinor Smith are student reporters 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.