Sen. Llew Jones

HELENA – Key lawmakers Thursday indicated the Legislature will meet in special session in the coming months to help solve Montana’s budget crisis – but said it’s up to Gov. Steve Bullock to outline what spending cuts he’s willing to make first.

“There’s no value in the special session until the cuts are made,” state Sen. Llew Jones, R-Conrad, told MTN News. “Because we have to know what we’re working with.”

The state is facing a $227 million budget hole, brought on by record-high firefighting costs and lagging tax revenue.

Bullock has authority to cut state-agency budgets by up to 10 percent to balance the budget, and his administration submitted proposals last month for that level of cuts.

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But Jones and other members of the Legislative Finance Committee said Thursday they don’t expect the governor to use only spending cuts to balance the budget.

The bipartisan panel unanimously passed a resolution that said those cuts are too deep, and recommended that Bullock choose reductions with the “least possible impact” on the Montana’s most vulnerable citizens and local property taxes.

The resolution came a day after scores of Montanans testified against the cuts, saying they would harm critical human services and other programs.

While the Finance Committee didn’t recommend a specific level of cuts, Jones suggested it could be “potentially half, or somewhere in that area” of the total deficit – and said the remainder could be covered by temporary tax increases, budget transfers or accounting changes.

The Legislature would have to convene in special session to approve anything other than the budget cuts.

“I don’t think that the majority of folks, anywhere in this committee or across the state, believe this 10 percent cut as presented is realistic,” Jones said. “Obviously it will be some subset of this cut that the (governor) will arrive upon.”

In a statement Thursday, Bullock, a Democrat, said he’s glad the committee recognized that the cuts will harm Montana citizens – but that it “failed to offer any realistic solutions.”

Yet Republicans on the committee said they expect Bullock to come forward with proposals on the final spending cuts and other elements of a budget-balancing package.

“The ball is back in his court,” said Rep. Nancy Ballance, R-Hamilton, the chair of the committee. “He needs to complete his obligation.”

Bullock and members of his administration have been saying in recent days that the Legislature, controlled by Republicans, needs to be part of the solution, by meeting in special session and approving some form of tax increase or other actions to help mitigate the spending cuts.

Jones said Republicans might agree to some temporary tax hikes to cover the deficit the next two years, such as taxes on liquor, rental cars or tobacco.

He also said the state general fund could borrow funds from other state government accounts, or that lawmakers could reduce the amount of the year-end budget reserve now required by law.

Sen. Eric Moore, R-Miles City, said he recognizes the need for temporary revenue. But he also said that parts of the state, such as eastern Montana, are suffering through tough economic times, and can’t afford any substantial tax increases.

“These are real people we’re talking about raising taxes on, and they don’t have a lot of money to spend on extra taxes,” he said. “I think it’s just important to see the other side of the coin as well, and I think we need to work together to find a balanced approach to get through this, until times are better for all of us.”