Hard choices

The daunting task before the Senate Finance and Claims Committee last Friday was the budget shortfall in the $8.1 billion House Bill 2.

Prior to the general election, the governor’s budget office stated Montana had a $1.2 billion ending fund balance. Over the prior four years, and driven by a strong economy, the state government grew 41 percent by adding new programs, hiring more state workers, and increasing spending.

Since last fall, revenues have steady spiraled downward due to reduced payroll, lower oil and coal prices, and a struggling business sector. The ending fund balance is now less than $250 million and dropping. With the economy in decline, the senate was faced with a bill that was more than $80 million out of balance.

It would have been easy to ignore the problem and continue to spend money we don’t have, but that’s not right for Montana. No, the right thing to do is to pull back on the spending throttle and demonstrate fiscal common sense. Aside from scaling back on every “nice to have” program, the Senate Finance and Claims Committee looked at three main areas to find some savings.

The first area was reducing overall government growth. We made the decision to implement an across-the-board reduction in government spending by 2 percent. Even with a 2 percent reduction, every department in the government will still receive more money in 2010 and 2011 than they did in 2009.

Why? The answer is sustaining government services costs more money in the out-years due to government pay systems, pensions and the addition of new programs, such things as insurance coverage for autistic children. Even with federal matching funds, sustaining government is an expensive proposition.

The second area was funding a 3 percent inflationary increase in education. The Senate Finance and Claims Committee chose to fund the first 1 percent through general fund dollars and fund the remaining 2 percent with federal stimulus dollars.

The amount remains the same, but the source of funding provides a better balance sheet. Even though inflation stands at just 0.2 percent, few can argue that schools need help. In addition to a 3 percent increase, the schools will also receive an additional $48 million for infrastructure grants from the federal stimulus funds.

Lastly, and perhaps the most controversial, was how to fund the Healthy Kids. Under present law, families that are at 175 percent of poverty are eligible for the government-provided Children’s Insurance Program (CHIPs). Even though openings are still available at the 175 percent level, most experts agree that the program has been successful.

Under the voter initiative passed in November, the law allowed the level of poverty to be increased to a maximum 250 percent. After federal matching, the state’s share is $22 million in 2010 and increases over time.

It was suggested that insurance company premiums pay for Healthy Kids so it does not affect the state budget. While it is true that the funding for CHIP is derived from insurance premiums, those funds were diverted from the general fund which, in turn, either needs to be replaced by an increase in taxes or a reduction in services.

Given the state of finances, we voted to increase funding for CHIPs to the 200 percent of poverty level. At 200 percent of poverty, a family of four making around $57 thousand a year is now eligible for CHIPs. Across the state, that represents an increase of about 15,000 kids.

To put it into perspective, the average income for a family of four in Montana is about $56,000. The bottom line is we funded what we could pay for. In the end, the Senate Finance and Claims Committee voted to adopt the measure along party lines, with the exception of Senator Minority Leader Carol Williams, D-Missoula, the wife of former Montana Congressman Pat Williams.

It is never easy to say no. With few exceptions, every program brought before the Senate this session had merit and was worthy of funding. Additional job training, raising teachers salaries and keeping our public lands accessible and healthy all are justified.

Adding to the mix is the very real concern about assisting our aging population through services such as Meals on Wheels, etc. We have to make hard choices and stay true to living within our means. My priority remains jobs, education and traditional conservation so we can leave our children with a rich legacy and the tools necessary to reach their potential.

Sen. Ryan Zinke, R-Whitefish, represents Whitefish and Columbia Falls.