HELENA – The Bullock administration will announce Wednesday it’s asking most state agencies for plans to cut 10 percent of their budget, to avoid deficit spending as state tax revenue flags and firefighting costs escalate, MTN News has learned.
Sources told MTN News that Gov. Steve Bullock will ask that spending-reduction plans to be submitted to his budget office by next week, and that the cuts could be implemented as soon as this year.
The governor has authority under state law to ask executive agencies to cut budgets up to 10 percent for the current two-year budget period, which started July 1, to avoid deficit spending. Any cuts beyond that amount must be approved by the Legislature in special session.
Any spending cuts ordered by the governor apparently would be in addition to nearly $70 million in cuts already imposed when state revenue failed to meet certain targets on June 30.
The law requiring the latter cuts also transferred $30 million out of the state’s firefighting fund to cover budget shortfalls elsewhere in state government.
The rash of summer forest fires, however, already has drained the remaining $30 million in the fund, and firefighting costs continue to escalate well past that amount, sources told MTN News.
Several weeks ago, the governor’s budget office asked many state agencies to submit plans for 5 percent cuts that could be imposed if state tax revenue didn’t meet expectations.
Sources told MTN News that the plans for 10 percent cuts would supersede the proposals for 5 percent cuts, and would not be in addition to those initial plans submitted to the governor’s office Aug. 18.
The state university system is among the agencies that submitted the 5 percent budget-cutting plans, outlining cuts to campus budgets of nearly $9 million.
Kevin McRae, deputy commissioner of higher education for communications and human resources, said Tuesday that any cuts to the university system budget would have to be approved by the state Board of Regents.
At a 5 percent cut, some campuses might be able to use reserve funds to avoid layoffs, but others would have to cut programs and staff, he said.
The law allowing the governor to cut agency budgets up to 10 percent also extends to some agencies headed by other elected officials, such as the Department of Justice, Office of Public Instruction, state auditor and secretary of state.
However, the Justice Department is the only one of those agencies whose budget has a substantial amount of general fund money – which would be the target of the cuts.
The other offices get most of their funds from special fees or taxes that aren’t part of the general fund.
The Legislature, the state Judicial Branch and state funding for schools also would be exempt from the cuts.