Mont. Lawmakers Work To Close Budget Shortfall

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Montana lawmakers were working frantically in a special session last week to close a $70 million budget shortfall, threatening in the process to cut some $26 million from public school budgets.

Earlier this month, in a rare Saturday-evening session, lawmakers in the Republican-controlled House passed a measure that would cut state aid to school districts by 2.8 percent, or $11 million. It also would effectively force districts to spend almost $15 million from their reserve funds to help balance the budget.

In a 53-to-47 party-line vote, the House passed a measure that opponents said would be particularly harmful to poor districts, which not only would lose state aid, but also would be unlikely to be able to raise enough through local property taxes to make up for the losses.

"You are providing a real double kick in the head to poor districts,'' said Rep. Mike Kadas.

Mr. Kadas previously had offered two unsuccessful amendments to soften the impact of the cuts.

Tax Increase Killed

The special session was called late last month after state taxpayers mounted a successful petition drive to block a major income-tax increase previously approved by the legislature.

The petition drive exacerbated a host of financial problems in the state, including a miscalculation of the amount of state aid owed to schools under a new foundation formula enacted last spring in the regular legislative session.

The shortfall in education aid added $14 million to the overall deficit.

In an effort to make up the shortfall, the House Appropriations Committee earlier made cuts to the state's Medicaid budget and in other areas of human services.

But, while the Senate worked to pare down the budgets of other state agencies, the House took up the volatile issue of cutting the foundation formula.

Lawmakers were tempted to look for a source of revenue in the roughly $50 million that districts have accumulated in their reserves, noted Eric Feaver, the president of the Montana Education Association.

"We're talking about pretty punitive, slash-and-burn tactics,'' he said.

Still, Mr. Feaver acknowledged that there are few alternatives for closing the funding gap.

"We will lose $26 million in state and local funding for public schools, and the issue really is how,'' he said. "All the parties in the education community are trying to figure out what to say when we meet with [Gov. Marc Racicot] tomorrow.''

'One-Time Money'

The budget battles so far have highlighted how difficult it is to achieve the necessary compromises to ease the pain of school-spending cuts.

The House education committee, for example, cut a provision out of the school-spending measure that would have required high school districts with 35 or fewer students located within 25 miles of another high school district to cover half the costs of running the school.

The provision was strongly opposed, however, by parents and community groups. They argued that the provision would disrupt local communities and force students to travel long distances to school.

As they struggle with such difficult issues, observed Greg Groepper, the assistant state superintendent of public instruction, lawmakers need to keep in mind the lessons of a previous raid on districts' reserve funds in the late 1980's.

"It's a bad idea, because it's one-time money,'' he said.

But, Mr. Groepper added, budget-cutting measures that would have shifted the burden of school transportation and extracurricular activities from the state to local districts already have been defeated.

Vol. 13, Issue 15

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