Budget crunch query: program cuts or increased taxes?Community Voices
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Budget crunch query: program cuts or increased taxes?
I had originally planned to write a report on some of the activities going on with the Legislature during the interim. However, with the current budget crisis facing Montana, and next week's special session, I believe many of you are interested in hearing what your legislators think about current economic issues.
The House Appropriations Committee met last week and had a chance to take an in-depth look at the governor's and other proposals for dealing with the budget shortfall. If you followed the news accounts, you know that many people testified before the committee and most were opposed to the reductions in funding levels.
In August of 2001, the ending fund balance was projected to be $173.5 million. Today, we are facing an $80 million deficit and the future doesn't look at all good for the next biennium. The Legislative Fiscal Division says, "The deficit is almost entirely the result of the lingering recession and deep stock market dip, causing income tax and capital gains tax collections to drop dramatically." A majority of other states are facing the same situation and are short several hundred million dollars.
This biennium, the general fund budget was increased by $187 million. The proposed cuts are actually reductions in the increases given by the last session of the Legislature.
We Montanans seem to have been on a spending binge in recent years in an attempt to employ more people and serve more needs. We must ask ourselves, are the services that we demand really "needs" or are some of them just "wants"?
The number of state employees has grown from 10,132 on June 30, 1991, to 12,934 on March 30, 2002 an increase of 27 percent. During the same period, our population has increased approximately 15 percent.
Along with the increase in employees has come a huge expansion of office space either owned or leased by the state of Montana.
How many of you reading this article had the mindset in 1990 that what this state really needs is more employees? Only 15 states have more state and local government employees per capita than Montana. In most of those states, the average income is higher than in Montana. In view of this fact, I am very reluctant to support substantially higher taxes on our citizens.
Are we going to reduce funding levels or increase taxes? No one has called me and asked me to increase their taxes. When Montanans are given a chance to vote on tax increases, they almost always reject the proposals.
Reducing funding will not be an easy task, but a necessary one.
There is some revenue increasing proposals that will come before the special session. Three that I believe will get some consideration are an increase in the bed tax, an increase in the car rental tax and an increase in cigarette taxes. One that I could support to help ease the burden on Education and Health and Human Services would be the increase in cigarette taxes.
Again the question, are we going to reduce funding or increase taxes? I have received many phone calls and letters from individuals and organizations. Everyone seems to be saying, "Don't cut my program." The truth of the matter is, folks, we are all in this together and we must all share the burden. I believe that the special session will mostly reduce the funding levels and there is a chance that an increase in the cigarette tax may happen.
If you want to get a message to me during the session, you may call me at the Capitol at (406) 444-4800 or at my home, (406) 355-4971, and I will get your message.