Montana lawmakers worked into the early-morning hours Thursday to fashion a deal to fill the state’s $227 million budget hole, agreeing to a package of spending cuts, fund transfers and one, big charge on the state workers’ compensation fund.
The plan also includes at least $15 million from a fund controlled by the company that operates Montana’s only private prison – and that can be accessed only if Gov. Steve Bullock negotiates a new contract to extend the prison contract with CoreCivic.
“It doesn’t hold a gun to anyone’s head,” Sen. Llew Jones, R-Conrad, said Wednesday of the bill that dictates how the private-prison funds can be used to fill the deficit. “This bills provides options. I think these options are important to a successful conclusion of this session today in this time.”
The 600-bed private prison near Shelby is in Jones’ district, and CoreCivic’s contract expires in 2019.
The special session, called by Bullock to balance the state’s budget, started Tuesday and wrapped up after two long days of back-and-forth negotiating primarily between the Democratic governor and the Republican majority at the Legislature.
The state Senate adjourned at 12:36 a.m. and the House followed suit a half-hour later.
Bullock had the power to order spending cuts to cover the entire shortfall, but called legislators into session to consider his proposals to minimize the cuts to government programs. He proposed about $76 million each in transfers and budget cuts, and $75 million in temporary taxes, including the work-comp charge.
Republicans then expanded the session agenda to include other items, such as using the private prison account.
Lower-than-expected tax revenue and a $45 million cost overrun for firefighting costs this summer led to the deficit.
Components of the deal approved Thursday include $76 million in spending cuts outlined by Bullock and contained in a bill passed by the Legislature, $94 million in one-time transfers from a laundry list of funds outside the main treasury, and the $30 million charge on the Montana State Fund’s investment portfolio.
The State Fund, a quasi-governmental agency, insures about 23,000 businesses against on-the-job injuries.
Republican lawmakers also passed a bill to require selected state employees to take furloughs, saving the state $15 million over the next 19 months – but it was unclear whether Bullock, a Democrat, would sign the measure or veto it.
In a statement after lawmakers adjourned Thursday morning, Bullock said they “reached a reasonable and responsible compromise to balance our budget and pay for Montana’s record fire season.”
He said he was disappointed that he couldn’t reach “full agreement” with Republican lawmakers, but complimented them for minimizing “the impacts of severe budget cuts on the most vulnerable among us.”
House Speaker Austin Knudsen, R-Culbertson, told reporters after the adjournment that Republicans kept their promise not to raise taxes on “hard-working Montanans,” and gave the governor the options he needs to fix the budget.
“The fact is, Governor Bullock called us in here this special session with no plan, so Republicans stepped up with a plan,” he said.
While Democratic lawmakers supported some of the budget deal’s bills, they opposed the bill authorizing the private-prison money and voted against the budget cuts.
Sen. Mary Caferro, D-Helena, said she had hoped the Legislature would do more to lessen the cuts – and was disappointed with the outcome.
“People who are standing by, counting on us, the thousands, the tens of thousands of people who will be negatively impacted by these cuts are standing by and waiting to see what we do today,” she said Wednesday. “And they were actually counting on us to do something different than the governor’s cuts. …
“That’s the last place that we should start – services for people who absolutely need them. They’re called essential for a reason.”
The bill directing the private-prison funds to be used to reduce the deficit -- Senate Bill 9 – also said Bullock can use any private-prison funds over $15 million to offset some of the budget cuts.
The state has paid about $32 million into the fund controlled by CoreCivic since its contract to manage the Shelby prison began in 1999. The money can be used to purchase the prison, but CoreCivic earlier this fall offered to give the money back to the state for any use – if the state agreed to extend CoreCivic’s contract for another 10 years.