HELENA – Republicans in control of the state Senate started chopping spending plans Friday, taking money out of state agencies, shifting education funding to federal sources — and even rolling back voter-approved funding for children’s health insurance.
The Senate Finance and Claims Committee first voted on party lines in the morning to reduce state agency funding by $27 million. The panel also reduced state funding of education more than $30 million — with the promise to later backfill that money from federal stimulus money coming to the state.
But the move that perhaps caused the biggest rift was the one to take another $30 million out of the planned expansion of the Children’s Health Insurance Program. Voters just approved the idea in November by a large margin, and it was a signature issue for Democrats.
Sen. Carol Williams, D-Missoula, begged Republicans to keep full funding of the initiative intact.
“What you are basically asking this Legislature to do is, just a few months from a general election where 70 percent of the people said we want that initiative, you are asking us to turn around in this committee and say they didn’t know what they were talking about,” Williams said. “You are using the excuse we don’t have money, when we have money in the bank.”
Republicans argued they would still be increasing CHIP over current levels, just not as much as approved by voters.
Currently, families earning up to 175 percent of the poverty level qualify for the program. The voters sought to move that to 250 percent, while the GOP plan approved in committee rolls it back to 200 percent.
The panel was trimming state spending in the main two-year budget, which came over from the House with $3.3 billion in state money. Total spending with federal money, comes in at over $8 billion. Lawmakers are separately working on a plan to spend about $880 million in federal stimulus money.
Republican leaders said they want to reduce spending of state money in order to make sure that it can withstand a downturn in revenues if the recession’s effect on state finances worsens.
The GOP lawmakers in charge of the committee argued that the state agencies still get more money than in the current budget period.
The 2 percent cut hit all areas of government except K-12 education, and saves $26.7 million. A series of much smaller cuts saved another half million.
The move to reduce K-12 education spending cuts growth in that area from 3 percent to 1 percent — with a promise to make up the difference with federal money next week in House Bill 645. Leaders did not say what priorities in the stimulus plan would be axed in favor of base education funding.
“We’re going to have to go to House Bill 645 and make good on this commitment. That is the next step,” said Senate Majority Leader Jim Peterson, R-Buffalo.
Democrats argued the move will make it very difficult on the state to come up with that same money in the next budget two years from now once the federal money is gone.
Democrats said it is unwise to cut government services, like higher education and health care, at a time when people are losing their jobs and will most need help.
“What are those people going to do? They are going to be calling state government trying to find ways to get retraining to get benefits, to get health care,” said Sen. Mike Cooney, D-Helena. “That’s what we are cutting here.”
But Republicans countered that the 2 percent across-the-board cut only reduces the House proposal — and would not actually cut any budget from current spending levels. They said it is needed to prepare for a downturn in tax collections as people lose jobs and lose money in the stock market.
“These departments are going to receive more money in 2010 and 2011 than they are today, they are not just going to get as much,” said Sen. Ryan Zinke, R-Whitefish. “If you look in comparison to what’s happening on our state, it is prudent and justifiable.”
The committee chairman, Sen. Keith Bales of Otter, said the federal stimulus money that the committee reviews next will allow them to buoy all the budgets a little that get trimmed in House Bill 2. The $880 million federal stimulus money is in House Bill 645.
“We are not asking our state agencies to live that cheaply; we are still giving them more money than they had,” Bales said. “Yeah, they may have to tighten their belt some. But I think most other people around the state are tightening their belts also.”
But they weren’t all cuts.
One successful motion came from Republican Sen. John Brueggeman of Polson who added a little money into the budget to pay for CHIP to cover contraception. He convinced a few other Republicans to back the move, saying teen pregnancies among the ranks of the poor are costly to state services.
“We have to do everything we can on the side of contraception,” he said. “It’s a small insurance policy really on trying to promote some prevention.”