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Montana Governor Says Coal Money Could Reduce Cuts
State Budget
HELENA – Gov. Brian Schweitzer said Wednesday that if Montana's Land Board approves an $86 million bid for state coal leases, the money could be used to reduce pending state budget cuts he is considering.

Schweitzer said some of the money could also be used to fund local stimulus projects that the administration currently has frozen — as long as everyone understands it's coal money that is making it possible.

The governor, who said avoiding cuts for services to the disabled would be his top priority, said not all cuts may be avoided.

"I am not using an ax here. This is a surgeon's knife," Schweitzer said. "We are going to carve small pieces out. If I carve too much there will just be more money available when the appropriators arrive next legislative session."

But first, the Land Board must approve the bid from Arch Coal Inc. that gives it the right to mine a half-billion tons of state-owned coal in southeastern Montana near the Wyoming border, a place known as the Otter Creek coal tracts.

The board meets Thursday to make a decision. The Department of Natural Resources and Conservation is recommending approval.

Environmentalists, without success, have been trying to persuade the Land Board chaired by Schweitzer to stop the development. They argue a mine would industrialize a rural area of Montana and exacerbate global warming when the coal is burned.

Secretary of State Linda McCulloch, a member of the Land Board who has advocated for leasing the coal land, said she expects to vote in favor of it Thursday. She pointed out that up to a billion dollars in royalties would go into the trust that provides money to state schools.

But McCulloch, who was previously superintendent of public instruction, hopes the upfront bonus bid also is used to help education.

"Of course it's my hope we use that money for schools in Montana," she said.

The governor said he has been particularly troubled by proposed budget cuts that would trim services for the disabled.

"If we can't protect our most vulnerable, what does that say about our society?" Schweitzer said. "It's not just me, I think we Montanans have a special place in our heart for the disability community. I am going to pull back from those cuts if that money is approved."

The governor is currently mulling a $40 million cut, almost 5 percent, to the state budget as a way to ensure the state doesn't face a deficit next year.

The administration's move to freeze spending on more than $3 million of local stimulus projects has drawn the ire of some Republican lawmakers and local officials.

The Democratic governor said the coal money would allow him to release that money — but with some conditions.

Schweitzer said he may personally inspect the projects to make sure they are worthy. And, in an apparent jab to Republicans, he said he may not send money to districts of legislators who originally opposed allocating the stimulus money last year in House Bill 645.

Sen. Dave Lewis, a Helena Republican, was among the first to raise the issue of the frozen funding. A new firehouse in Ryegate, currently on hold after the administration's decision, is in Lewis' district.

"Remind the governor that I voted for House Bill 645 — and if I have to come up there and kiss his ring to get the firehouse in Ryegate, I will do that," Lewis said. "Let's get things down the road here."

The governor said he also wants to make sure local communities know where the money is coming from.

"Our financial situation has changed markedly, and it has changed because of coal," Schweitzer said. "I would like to hear from these community leaders that they understand this is coal money, and they want to use coal money for their projects."
 
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