HELENA – Gov. Steve Bullock Monday said some state spending must be cut to balance the state budget, in the face of a revenue shortage – but that the Legislature could help mitigate those cuts by approving some form of tax increase.
“If legislators will work with me, there is a better way to do this,” he told a group of Montana mental-health providers meeting in Helena. “And that’s both with certainly some cuts, and transfers, and revenue increases.”
“In order to do that, though, I need to have a willing dance partner.”
Bullock also said the tax increases could be temporary, instead of permanent, and listed a few possible items that could be subject to the higher taxes: Tobacco, lodging, rental cars and booze.
Bullock, a Democrat, has authority to cut up to 10 percent of most state departments’ budgets on his own, and is considering proposals from the agencies.
Yet any tax increase would have to be approved by a special session of the Legislature, which is controlled by Republicans. Bullock can call lawmakers into session, but without GOP help, no tax increase would pass.
So far, GOP leaders have said they’re not interested in supporting tax increases to help the state out of its budget crisis.
Bullock said Monday that $227 million in cuts are needed to balance the state budget, which is running out of money because of less-than-projected tax revenue and a record-setting firefighting season, which has cost the state more than $60 million.
The state had that much money in a special firefighting fund in June, but $30 million had to be transferred earlier this summer to offset revenue losses across state government.
Bullock told the Behavioral Health Alliance of Montana on Monday that proposed cuts to mental-health services and other health-care programs would be harmful and reverse progress the state had made to expand coverage.
“When we make cuts to some of these programs … it’s going to be real hard to get them back to where they need to be,” he said.
Bullock said he remains optimistic that state lawmakers will work with him to avoid the deepest level of cuts, possibly by finding a way to fund some of the firefighting costs, with temporary revenue increases.
“I think that many of our legislators get that you shouldn’t be funding fires by eliminating Hospice (care),” he said. “There are some legislators who are saying, `No permanent tax increases,’ but maybe temporary revenue to pay for that fire bill. That’s a start.”
The governor said he would prefer to raise taxes on the wealthiest Montanans, as he proposed during the 2017 regular legislative session, but that Republicans won’t support it.
He also rejected the notion that more cuts should be made in state personnel, rather than services.
“There are fewer state employees working today than when I took office,” Bullock said.