As lawmakers prepare to gather in Helena on Monday, the question looming over the state Capitol is this: can Democratic Gov. Steve Bullock hammer out a deal with House and Senate Republicans, or will lawmakers leave town without an agreement and force Bullock to slash hundreds of millions in government programs and services to cover the state’s the $227 million budget shortfall?
“As far as I know this is uncharted territory,” Republican House Speaker Austin Knudsen said in an interview Friday. “I think it’s highly unusual that the governor called a special session without having a deal in place.”
Even some Democrats are quietly questioning the wisdom calling lawmakers back to the capitol without a clear path or obvious solution to the budget problem. Some fear it could open a “Pandora’s box” of legislative chaos.
“I think it is going to be a disaster,” one House Democrat, who asked not to be named for fear of reprisal, said. “That said, I sort of think that the governor does not have a choice.”
It seems unlikely Bullock’s administration and Republican lawmakers – who have ruling majorities in both houses – will reach a compromise before lawmakers arrive on Monday to begin hearings on a raft of bills aimed at filling in the budget hole.
As of Saturday afternoon, five bills had been introduced and another eight bills were being drafted. Six of those are at the request of the governor.
While both sides appear relatively close to agreement on several key components of budget fix, Republicans and Democrats are dug-in on other critical issues, such as whether the state should accept $30 million from a private prison contractor in exchange for contract extension, or whether the state should temporarily raise taxes on hotels and rental cars to help offset the cost of Montana’s costly fire season.
On Friday Republicans improved the possibility of continued negotiations by officially expanding the scope of the special session.
When Bullock on Nov. 6 issued his call to lawmakers to return to the Capitol on Nov. 14, he narrowly defined the scope of the special session. Under the governor’s proposal, lawmakers were limited to considering Bullock’s solutions to the budget mess, which Republicans complained relies too heavily on tax increases and leaves them out of the discussions about where cuts should be made.
“I could not see a pathway forward to the needed votes if the only options available to the Legislature were those contained in the governor’s narrow call,” said Conrad Republican Sen. Llew Jones, who chaired the Senate Finance Committee during the 2017 session. Jones, along with House Appropriations Committee Chair Nancy Balance, of Hamilton, were among a handful of Republican lawmakers who have for months been negotiating possible solutions with the governor and his budget team.
Bullock’s proposal, in part, calls for a 3 percent hike in the accommodations tax, which affects hotels and campgrounds, and a 6 percent increase in rental car taxes. He’s also seeking a 3 percent fee on excess investment holdings of the Montana State Fund to offset the costs of an expensive wildfire season.
Key Republicans said they are mostly on board with two thirds of Bullock’s proposal – namely the balance transfers and cuts to state agencies – but that he tax hikes remain a serious sticking point.
“If we were to operate just under the governor’s call there was no opportunity for a compromise solution,” said Republican Rep. Rob Cook, of Conrad. “With the additions of the second call and the items that are on there I think we can get to an answer that is palatable to most.”
As of Friday afternoon 81 Republicans had signed the Republican call to expand the session. It took little more than a day to get the necessary 76 signatures, which Jones and Cook said shows the Republican caucus is unified in their desire to have an expanded role.
The fulcrum for negotiations over how to resolve the state’s $227 million projected budget shortfall seems to be the private prison in Shelby.
The prison’s owner, CoreCivic (formerly Corrections Corporation of America), has offered to return some $30 million dollars of state funds set aside for the eventual purchase of prison in exchange for a 10-year renewal of their contract.
Democrats are incensed over the idea of extending the private prison contract in the midst of the current budget crisis.
“I am fundamentally opposed to a large out-of-state corporation coming in and trying to hijack our budget crisis to negotiate sweet deal for themselves,” said House Minority Leader Jenny Eck, of Helena.
While Cook characterized the CoreCivic proposal as a “sweetheart deal for the state,” Eck characterized it as a cynical attempt by a private company work billions of dollars to line their pockets.
“If they wanted to come in and write a $30 million check to help Montana out of the goodness of their heart I would welcome that. That is not what’s happening here. They are taking advantage of a budget shortfall crisis situation and trying to insert themselves in it with benefits to themselves,” Eck said.
Cook said a CoreCivic deal “is a necessary part to any solution.”
Eck said Democrats have already made “deep concessions” to appease Republican demands, and now Republicans have Bullock and the Democrats’ “backs against the wall.”
“The Republicans have decided they have a lot of priorities ahead of protecting working Montanans from really, really harmful cuts,” Eck said. “We have been trying for months now to make significant compromises. This is not how we would be treating this if we were in the majority.”
With three days to go before lawmakers arrive at the Capitol for the first special session in a decade, Republican and Democrats appear to be at a significant impasse.
Republicans hold a 59-41 majority in the House, and a 32-18 majority in the Senate, which means Bullock needs Republican votes if he has any hope of solving the budget crisis in a way that doesn’t result in massive cuts. Cook and Jones in past legislative sessions have been Bullock allies, playing critical roles in marshaling enough GOP votes to push some of Bullock’s key policy proposals over the top, such as 2015 Medicaid expansion bill.
But this time around the Conrad lawmakers appear to have drawn a clear line in the sand: Bullock either takes the CoreCivic deal or he’s on his own.
For his part, the governor has remained relatively quiet since calling the special session. Asked for comment during a brief encounter in the governor’s communications office on Thursday, Bullock said he “had calls to make” and left he office.
The governor’s communications director, Ronja Abel, issued a one-sentence statement Friday: “The Governor is committed to balancing the budget in a responsible way and he will continue to work with Republican and Democratic legislators to find a path forward.”