Budget Stabilization Plan Outlines State's Response To Future Revenue Shortfalls

Apr 27, 2017
Originally published on April 26, 2017 5:01 pm

At the end of a legislative session defined by the state having less money than initially projected, lawmakers Wednesday negotiated a new budgeting system designed to protect the state against future revenue shortfalls. 

With state revenues down from slumping markets for oil, gas, coal and agricultural products, lawmakers spent most this session arguing over spending priorities in the state budget.

Democratic Governor Steve Bullock proposed a series of tax increases to solve the problem and maintain a $300 million rainy day fund, but that didn’t sit well with the Republican majorities in the Senate and House.

Instead, Republican and Democratic legislative leaders approved an alternative plan Wednesday that they’re calling the "Budget Stabilization Act."

Randy Brodehl, a Republican from Kalispell, sat on the committee that gave Senate Bill 261 initial approval.

"So that when we have a budget crisis, either like we are in right now, or worse, so that we know where the money is going to come from, what cuts are going to be made, and at what levels they’re going to be made."

The budget stabilization plan outlines how the state will save money in good revenue years, and creates a system for how the state will respond to a revenue shortfall before it happens: who gets cut and by how much.

The bill would create a four-tiered budget system. If state revenues fall below the levels defined by each of those tiers, it will trigger fund transfers and cuts in state agencies.

The state already has a plan in place to make automatic cuts when revenues fall, but the new plan is more detailed, and calls for gradual cuts sooner.

Brodehl says that will prevent the Legislature or governor from ordering larger cuts after the budget is already dug into a hole.

"And so we’re not caught in that spot of having to make rapid fire decisions at the last minute when the revenue projections are going down."

House Minority Leader Jenny Eck initially argued against the budget stabilization plan in Wednesday’s hearing. She said taxes on the wealthy are preferable to spending reductions to solve the state’s budget problems. But Eck eventually agreed the new plan was fair, and voted for it.

“There were more opportunities to bring more money into the state and those opportunities were rejected," Eck said. "And I think it’s worth noting that. When we talk about cuts, they are painful and there people behind those cuts and stories behind those cuts."

Republican and Democratic leaders unanimously supported the new plan to stabilize the state budget in the future. Senate Bill 261 is awaiting final votes of House and Senate, where it is expected to pass, before heading to the governor’s desk.

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