Speech
Budget Announcement
Remarks of Governor Judy Martz
State Capitol
11/15/2002
Speaking Points – Governor Judy Martz
November 15 – 9:30 a.m.
Speaking Time: 15 Minutes
***Check Against Delivery***
Good morning, and thank you all for joining me here today.
As we present the budget today, I wish I could tell you that Montana’s economy is strong and tax revenues were rolling in. I wish that good-paying jobs were available for every Montanan and that we had enough money coming in to our state’s coffers to fully fund our programs.
Unfortunately, that is not the case.
With a two hundred fifty million dollar deficit, this is the most challenging budget crisis our state has faced in sixteen years.
So, why are revenues down? Just like the rest of the nation, in the 1990’s we saw stable, modest economic growth in Montana. However, across the nation, economic storm clouds began rolling in around the summer of 2001, as our nation entered a recession.
While Montana was not as hard hit as other neighboring states like Idaho and Washington, we still felt that recession, and we continue to feel its impacts today.
It is projected, and it is our sincere hope that the economy will turn in the next 2 to 3 years, however we must build our budget based on current revenue projections.
Regardless of our financial condition, as Governor, I am required by law to present a balanced budget to the state’s legislature. This has been a daunting task – a difficult challenge, to say the least.
The budget that we will present to the legislature meets our statutory obligations.
I want to give a big thanks to Chuck Swysgood and the entire Office of Budget and Program Planning. I also want to sincerely thank my cabinet and the offices of other elected officials for their tireless work on this budget.
These are difficult times, but these individuals have truly stepped up to the task at hand.
Chuck and his office have worked uncountable hours to develop a budget that returns us to structural balance.
This means that, by fiscal year 2005, the state is spending no more money than the revenue we’re projecting.
Today, I will highlight a few key areas of the budget.
[Overall Parameters]
As Chuck and his staff began preparing this budget, I outlined for them a number of key parameters.
First, I asked that they not raise taxes on Montanans who are already 46th in per capita income. Our residents cannot afford higher taxes. Our economy cannot afford higher taxes.
Many think I have made this decision because of a pledge I signed. They are wrong.
I made this decision because I believe it is right in my heart. I do not believe that we should raise taxes on Montana families when many families aren’t making ends meet.
They are struggling already, and many still cannot afford health insurance, let alone pay higher taxes.
I don’t believe we should raise taxes on Montana families in a recession, and my budget reflects that belief.
I believe that when times are tough, we all have to tighten our belts. Just like families have to prioritize when the paychecks aren’t covering all expenses, state government must operate in the same way.
I want to thank the volunteers, organizations, churches and families that have always stepped forward to help those in need.
We see this occurring with our own state employees. State employees are true examples of people stepping forward when times are tight.
This year, our state employee charitable contributions were up twenty-four percent over last year in the first three weeks of our annual giving campaign. This type of commitment shows that together, we can and will work through these difficult budget years.
The second parameter I outlined for the budget office was that they minimize the impact to Montana families and those in need as much as possible. A number of program reductions initially proposed by agencies were simply unacceptable to me.
Given the size of the potential deficit, the cuts that would be needed to balance our budget without any additional revenues are just too deep, and hurt too many people.
As Governor, I cannot tolerate that level of hurt.
So, let me outline the programs that I asked be restored from initial agency proposed reductions.
[Health and Human Services]
The first area I would like to highlight is one that has been most noted in the press as of late – our health and human services budget.
Over the past two weeks, we have held four health and human services roundtables to discuss budget priorities.
I wanted to take the budget discussion to those most impacted by the proposed budget reductions. I wanted to hear their creative ideas – and to see the programs we provide from their perspective.
Just like those participants, I too care, and grieve that the reductions proposed would mean a change in the level of services provided by state government.
I want to thank my health and human services policy advisor Jean Branscum, DPHHS Director Gail Gray, Deputy Director John Chappuis, and all of those who took time out of their busy schedules to join me at those roundtables. As we built our human services budget, your recommendations were taken into consideration.
These are some of the programs that I required would not be removed from the budget.
[Breast and Cervical Cancer treatment]
I asked that the breast and cervical cancer treatment program funding be continued in the next biennium.
You will note that that program is included in our budget. This program compliments the screening program that already exists.
[CHIP and other programs]
In other areas of health and human services, I required that the funding for the Children’s Health Insurance Program or CHIP be held harmless.
The Montana Chemical Dependency Center chemical treatment facility in Butte will remain as is.
I required that Medicaid pharmacy benefits for the medically needy be restored.
I required that services for children with developmental disabilities, commonly called the Part C program, be restored.
And, I required that the funding for foster care services, including tribal contracts, be held intact.
In addition, this budget also restores several provider rate reductions that had initially been recommended.
[Education]
Now, I would like to turn your attention to our K-12 education proposals.
Education is and has always been one of the top priorities of our administration. In these difficult times, we must work together to strengthen Montana’s excellent education system while living within current budget constraints.
One reflection of the interest in public schools during the interim was the Governor’s Public School Funding Advisory Council. This group held hearings across the state to find solutions for K-12 funding concerns.
These are the people’s recommendations and they received the highest consideration in preparing the budget.
I would also like to thank Lieutenant Governor Karl Ohs, our education policy specialist Kris Goss, and Amy Carlson, our education budget analyst for their tireless efforts in working and meeting with the education community.
Quality schools are a priority for the Administration and this budget reflects that importance. We recognize that it is much easier to maintain a quality system than it is to build one.
Our children are the future of this state. We are well recognized for providing a top quality educational system for our children. And I made a commitment to keep it that way.
And I commit to you today, that if a proposal comes across my desk that provides less state funding to K-12 education than I have recommended in this budget, I will veto it.
My education budget recommendations are consistent with a balanced view of all services provided in the state. This budget continues that tradition of Montana’s strong commitment to our students.
[Other Key Areas]
Before I close today, I would like to outline one other highlight of our budget.
In the Department of Transportation, as in all other areas that receive federal or other special revenue funding, our budget ensures that increases in other federal funding are taken into consideration.
This means that programs that exist via other means in our state budget can continue to operate with funds outside the general fund.
[Conclusion]
Because these programs will be restored, we would have been left with a $36 million dollar negative ending fund balance. In order to address that negative fund balance, I asked the budget office to propose a solution.
Chuck will answer questions in detail about that proposal, but basically, we will ask the legislature to transfer ninety three million dollars from the permanent coal trust to restore the depleted general fund balance.
In summary, the budget I’m presenting restores funding to some key programs. To reach those goals, the budget I’m presenting includes a combination of increased revenue projections, fund transfers and reductions in spending with no tax increases on hardworking Montana families.
I cannot begin to describe what an incredibly difficult and heart-wrenching process this has been.
No, we were not able to save everything we wanted. But we feel we were able to save what means the most to people. We listened and have acted in the best interests of our residents under these financial circumstances.
The reductions that are proposed are not reductions we would like to propose. It was our goal to reduce those impacts to the greatest extent possible.
Our work is not complete. I commit that we will work closely with both sides of the aisle to pass a budget that provides services to those most in need while not living outside our means.
At the same time we will continue to work tirelessly to see our economy bring more and better-paying jobs, tax reform and a strong education system for our kids.
We have proposed a budget that operates state government like families operate their budgets. We will not ask Montanans to pay more than they can afford, nor will we cut programs to the level that keeps food off the table for those most in need.
I will now turn the podium over to Chuck to answer specific budget questions. Thank you for your time.
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