Montana looks at cuts to fill budget shortfall
HELENA — Montana plans to cut programs and services to fill a projected $227 million budget shortfall in the midst of a disastrous drought and dozens of wildfires that are draining the state treasury.
More than 90 percent of Montana is in drought, creating tinderbox conditions that have led to its worst fire year since 2012. The state has spent more than $50 million on fire suppression since June — not counting the U.S. government costs to respond to fires on federal lands — and the blazes are likely to burn well into the fall, driving up those costs.
Montana has already exhausted its wildfire suppression reserve account and other emergency funds. Tax collections are below the estimates set in the state budget, adding to the financial strain.
The state is required by law to have a cash reserve of at least $143 million, but Gov. Steve Bullock’s administration forecast an $84 million deficit by 2019 if nothing is done — leaving a $227 million gap to fill, even after $70 million in cuts that were triggered last month by low revenue results.
As a result, Bullock ordered government agencies to submit proposals Friday to cut their budgets 10 percent, which would amount to at least $237 million in savings over the next two years.
Even if the cuts aren’t implemented fully, “program reductions will be substantial,” Bullock budget director Dan Villa said in a letter to department heads.
No cuts will take effect until lawmakers scrutinize the plans and make recommendations in a process expected to last at least two weeks.
The hardest-hit agency under the 10 percent reduction plan is the state Department of Public Health and Human Services. Bullock asked the department to find ways to trim $105 million in spending over the next two years, including in senior and long-term care, child protection services and addictive and mental disorder programs.
“To say this has been difficult is a tremendous understatement,” health department director Sheila Hogan said in an emailed statement. “We will do the best we can to minimize the impact on Montanans as much as possible, but we remain hopeful the legislature will work with the governor to find more responsible solutions.”
The state university system must identify another $44 million in spending reductions. State lawmakers already slashed the Office of the Commissioner of Higher Education’s budget in the 2018-2019 state budget passed in April.
Those previous cuts left a $19 million shortfall that resulted in tuition hikes, and Deputy Commissioner Tyler Trevor said tuition may have to go up again. It will be up to the Board of Regents to approve the cuts and tuition hikes, Trevor said.
“They all will have the ability to weather the storm, it’s just a matter of the tactics we take,” Trevor said of the state’s colleges and universities.
The Department of Corrections has the third-highest amount to cut, at $40 million over two years.
“Unfortunately, there are no good options for such significant cuts,” said Corrections Director Reginald Michael.
“We hope that throughout this process we can identify more responsible solutions to this situation, but for now we’ll keep making public safety decisions in the best interest of Montanans.”