HELENA – In the latest twist in Montana’s $227 million budget crisis, some Republican House leaders said Thursday any agreement on a solution involving the Legislature is far from settled.
“How can there be something close to a deal when the (Republican) House members have not even got all the information from leaders yet?” said House Majority Leader Ron Ehli, R-Hamilton.
And the GOP chairman of the House Taxation Committee told MTN News that he sees no need for any tax increases – which the Bullock administration has said should be part of a three-pronged plan to balance the state budget.
Rep. Jeff Essmann of Billings said it’s premature to hold a special session of the Legislature to make tax changes when Congress may pass a national tax-reform bill, that would affect tax revenue in Montana.
Essmann said if Congress and President Trump act to cut federal income taxes, that could eventually mean more state tax revenue for Montana, because it would lower deductions on state returns for federal taxes.
When asked whether that effect wouldn’t occur until early 2019, if the federal tax changes aren’t effective until tax year 2018, Essmann said he though the effects could be seen earlier in Montana.
Dan Villa, the budget director for Democratic Gov. Steve Bullock, told reporters on Wednesday he felt the administration and key lawmakers had agreed on a “general framework” to fill the budget hole with spending cuts, temporary tax increases and budget transfers.
Montana faces a deficit because of less-than-expected tax revenue and firefighting costs that ran more than $40 million over available funds.
Villa said lawmakers and the administration need to reach a more detailed agreement quickly, so the governor can call a special session of the Legislature this month to approve whatever tax increases and budget transfers are necessary.
But Ehli and other Republican legislative leaders said Bullock must outline what spending cuts he’s willing to make and what other proposals he is putting forward, to balance the budget.
“We’re waiting for the governor to lay out the parameters for a special session,” Ehli said. “The governor has to announce what he wants to do.”
Republicans control majorities in both houses of the Montana Legislature.
Ehli also castigated Villa for “threatening” to have Bullock make up the entire $227 million hole with spending cuts to vital services.
The administration said Thursday that it’s no threat, because if the Legislature doesn’t meet to add some revenue or approve some transfers, Bullock will have no choice but to order the entire cuts.
On Wednesday, Villa handed out a laundry list of possible tax increases and budget transfers or one-time charges that could be considered by the Legislature.
Ehli said legislative leaders received the same list only this week, and are in the process of informing their caucuses and gauging their reaction and level of support for the various options.