While the Montana governor did not paint a rosy picture for the next state budgets, he said Wednesday that he believes the picture is much better than many critics are painting.
“I think we’ve got a pretty good story to tell in Montana,” Gov. Brian Schweitzer said.
Schweitzer addressed a group of elected leaders, local residents and political candidates in a meeting at Bear Paw Development Corp.
Schweitzer said the forecast of some $300 million to a $400 million deficit is simply incorrect.
The Legislative Fiscal Division has predicted revenue for the next biennium at $3.57 billion, Schweitzer said. The current budget is $3.6 billion a biennium, $1.8 billion a year, he said. That leaves the state, in round numbers, $40 million short.
“We’ve got a $40 million shortfall, if they are right … ,” Schweitzer said. “Where we going to get that money? I know, we have $330 million in the bank. We’re still in the black.”
He touted the fact that Montana is one of two states — North Dakota is the other — that was able to balance its budget in 2009.
Schweitzer said he and the Legislature in the last five years have put more money into savings for the state each year than the previous 15 years of Republican-led state government. From 1991 to 2004, the average balance in reserve at the end of each fiscal year was $67 million.
“Since we’ve been running the state we’ve averaged $414 million in the bank on the 30th of June,” Schweitzer said. “Pay as you go, keep some money in the bank.”
He said his idea was, rather than borrowing money through bonding or borrowing from the Workers Compensation — Schweitzer said that was what had been done in the years prior to his administration — to “keep some grain in the bin, some hay in the field,” in case a recession did hit.
“Well, a recession did come along and 48 states got it wrong and Montana may have gotten it right,” he said.
He said he doubts that the state will be increasing spending in the 2011 session — it will be a lean biennium.
“I don’t think we’re going to be spending a lot of new money,” Schweitzer said.
He added that part of what the state has done since he took office — especially during the recession — has been to trim expenditures. That includes not filling positions as people retire or find other jobs, he said.
“Small businesses, big businesses all across America are finding ways to save money,” he said. “We’re just doing the same thing.”
He also took issue with reports that the budget has increased by $1 billion and his administration has added 1,000 new jobs.
The truth is, he said, the budget has increased about $350 million, with much of that going to the largest increases in K-12 and higher education funding in the history of the state.
“I’m not going to apologize for that,” Schweitzer added.
He said the number of new employees also is wrong. While the gross domestic product of the state has grown 65 percent in the last 10 years to $37.2 billion, the number of state employees has grown 2.3 percent.
The claims candidates are making about government growth under his administration simply are not true, Schweitzer said.
“It has no basis in reality,” he said. “You make it up, but somebody’s going to call you on it, and I just did.”
He said the increase was in education, in funding for social services, and for the Department of Corrections and the state taking over the Office of the Public Defender, previously run on the county level.
To reduce that budget significantly, those are the areas that would have to be cut, he said.
“Your either going to cut education, or you’re going to cut (Department of Public Health and Human Services), medication, or you’re going to cut incarceration,” Schweitzer said. “Educate, medicate, incarcerate: those are the things that we do; more than 50 percent of it goes for education.”
Schweitzer also said he thinks the predicted budget shortfall forecast by the Legislative Fiscal Division is greatly overstated.
“I think they’re wrong,” he said. “I’ll tell you why I think they’re wrong. I don't think they calculated the biggest wheat crop in the history of Montana at one of the best prices. I’m pretty sure.”
He said the strong agricultural year, along with good prices in other commodities — a good price on copper, huge increase in price of palladium, Montana oil production increasing at the fastest rate in country and coal production increasing at the fastest rate in history of state — will help the Montana revenue picture, Schweitzer said.
“We’re hitting on all cylinders except for timber, for lumber,” he said.