HELENA – Republican lawmakers said Friday they have enough signatures to expand the agenda of next week’s special session of the Montana Legislature, beyond what Democratic Gov. Steve Bullock has proposed to fill a $227 million hole in the state budget.
Their expansion will include consideration of accepting a $30 million offer by owners of the private prison at Shelby – in exchange for a 10-year extension of the company’s contract to manage the prison.
Lawmakers in both parties said the private-prison issue could be a major sticking point in the session, which opens in Helena next Tuesday. The session is expected to last several days.
Yet both sides – and the Bullock administration – also acknowledged this week that the main point of disagreement in the search for a budget-balancing deal is whether and how to raise any taxes. The private-prison money is linked to that issue.
“I can’t see any reason on earth by a Republican would vote to raise $75 million in taxes when we’re leaving $30 million on the table with (prison owner) CoreCivic and the private prison,” Rep. Rob Cook, R-Conrad, said Thursday.
Bullock has proposed using a three-pronged approach to balancing the budget: Nearly $77 million in spending cuts, which he’ll order himself; $75 million in temporary tax increases; and another $77 million in budget transfers or adjustments.
He limited the session’s agenda to his proposals when he issued the call on Monday.
The GOP expansion, when it becomes official on the session’s first day next week, allows several additional proposals to be considered, as outlined by Republican lawmakers.
Bullock’s budget director, Dan Villa, told MTN News on Thursday that he believes a majority of lawmakers are on-board with the budget cuts and most of the transfers, after weeks of negotiation between the administration and a handful of legislative leaders.
He said he’s optimistic that the administration and lawmakers can iron out the differences on the remainder.
“Really, we’re having a disagreement over $75 million in temporary revenue,” he said. “To me, when you’re two-thirds of the way down the path, you don’t try to make it look as though you’re further apart than you are. You work and you try to find that last third.”
Republican House Speaker Austin Knudsen, R-Culbertson, essentially agreed that the taxes are the flash-point – and said he would prefer that no taxes be increased.
“I think there are probably some of my caucus who feel a little differently about that, but right now frankly, I don’t think there are the votes to pass tax increases of any kind,” he told MTN News Friday.
Republicans hold a 59-41 majority in the House and a 32-18 advantage in the Senate.
Knudsen is a part of the conservative wing of Republicans, who generally take a hard line against any tax increases.
More moderate Republicans in the Montana Legislature, however, sometimes break off from their GOP brethren and join minority Democrats to forge a majority on tax-and-spending issues.
Whether that split will be a key factor in the special session remains to be seen.
Cook and Sen. Llew Jones, R-Conrad, members of the moderate GOP camp, have said they support extending the contract for the private prison, which is in each of their districts.
Cook says the $30 million could be used to lower or erase the need for tax increases, as part of the budget-balancing deal.
Under its current contract with the state, CoreCivic, the prison’s owner, controls a fund that contains $32 million in state money, set aside as a potential down payment for the state to buy the 20-year-old, 600-bed private prison.
The company has said it would release the money to the state, to help balance the budget – if the state agrees to extend the company’s contract up to 10 years. The current contract expires in 2019.
Bullock and fellow Democrats are adamantly opposed to renegotiating CoreCivic’s contract right now.
They argue that the state correctional system is in a state of flux, in the wake of major sentencing reforms passed this year, and that the private prison’s role in the system needs closer examination.
“(CoreCivic) wants to give us our money back, in exchange for a $150 million, long-term commitment to them,” said House Minority Leader Jenny Eck, D-Helena. “(This contract) is one that we need to look at carefully and not try to ram through in a two, three-day session without full transparency, by the public.”
Knudsen said the GOP’s expanded agenda will include a bill that may force the governor to renegotiate the contract and take the money.
The Republican expansion also will allow bills to impose an insurance-premium tax on two nonprofit health insurers, allow the state auditor to approve “waivers” from federal health-insurance rules, scrutinize the Bullock budget cuts, and encourage tree-thinning on state lands.
Bullock has proposed three tax increases: Raising the state lodging and rental-car taxes to 10 percent, from 7 percent and 4 percent, respectively, and imposing a $30 million fee on the state workers’ compensation fund’s $600 million investment portfolio.
While Republicans are expanding the agenda, Knudsen says he hopes it won’t lengthen the session – and that he’d like things to get wrapped up in a couple of days.
Other lawmakers told MTN News that three-to-four days may be a more likely expectation.