By Ron VandenBoom
Tuesday's rejection of a special session of the Montana Legislature by Gov. Marc Racicot had the Hill County Democratic leadership bristling with anger Tuesday at their monthly meeting.
Rep. Ray Peck, D-Havre, said he received word late Tuesday that the governor had rejected what Peck referred to as a "conciliatory" letter of compromise that was sent to Racicot in Arizona where he is campaigning for presidential candidate George W. Bush.
The letter chided the governor for not having passed a "legally acceptable form" of financing for Racicot's economic development plan, but offers firm support for finding an alternative means of funding from surpluses in the general fund.
The program is estimated to cost $20 million and estimated surpluses are now expected to range between $130 million to $140 million.
"We are willing to resuscitate your program," the letter states suggesting that "the largest ending fund balance in the state's history," be the source of the funding.
Racicot's spokeswoman, Mary Jo Fox, said Tuesday the governor opposes the idea of using the general fund to finance the program.
According to Peck, the governor wants a special session to agree on a permanent solution to the funding problem that does not tap the general fund.
Peck sees use of the general fund surplus as being a temporary fix to the plan while leaving long-term solutions in the hands of incoming legislators.
"We think that the governor's economic development program, that is law, should be funded," Peck told the Democrats in explaining why Racicot rejected rejected the letter. "It's kind of surprising that a governor that proposed a program doesn't have the guts to stand up and ask his people to fund his program out of the general fund."
On Jan. 20, the Montana Supreme Court struck down the somewhat complex funding scheme passed by the last legislature.
According to Sen. Greg Jergeson, D-Chinook, the funding of the plan was flawed from day one because it actually was little more than a "scheme to raid the Coal Tax Trust Fund."
"If it quacks like a duck and acts like a duck, it's probably a duck," Jergeson said.
Jergeson said the Republican majority was warned that the funding for the package was probably unconstitutional even before it was passed.
Jergeson told the crowd the Republicans were "absolutely intent" on using the $600 million Coal Tax Trust Fund to finance the program. He went on to remind the Democrats that the fund was not created for that purpose.
"It is not a rainy-day fund," he said. "It's not something to be raided when you're having trouble much less when times are good."
Jergeson said the fund currently saves Montana taxpayers about $60 million a year.
"That equals about 30 mills a year that would have to be replaced through increased taxes," he said.
That is 7 or 8 percent of the average community mill levy, he said.
He also reminded the Democrats of what happened to the Education Trust Fund that was created by the legislature prior to 1991 and was not constitutionally protected.
The fund eventually reached $70 million and was producing about $7 million in revenue for the state each year, Jergeson said. Half of the money was taken to help repair budget deficits and by 1991 the remainder was gone.
"Today there is no Education Trust Fund," he said.
Peck said Wednesday he is one of about 10 or 11 legislators who have petitioned the secretary of state to poll the legislature about holding a special session. If enough legislators agree, the special session could be held without the governor's approval.