Democrat floats money plan to GOP

HELENA - A House Democrat on Wednesday offered the Republican majority a counterproposal to its plan for finding money to balance the budget with money from the coal tax trust fund and a cigarette tax increase.

The suggestion from Rep. Kim Gillan, D-Billings, would provide more money than the GOP plan through a larger increase in the cigarette tax. It also makes the withdrawal from the coal trust a loan that must be repaid with interest using some of new tax revenue.

Gillan's bill, which modifies the Republican plan sponsored by House Majority Leader Roy Brown of Billings, marks the first time Democrats have expressed a willingness to tap the coal trust to deal with the state's money shortage.

''As Democrats, we wanted to show him we're willing to compromise on the coal trust,'' Gillan said, shortly after presenting the plan to Brown.

Brown said the overture may provide some room for agreement between the two parties, particularly the notion of repaying the coal trust using cigarette taxes.

''They've given us some ideas to work with,'' he said. ''We like some of them. We don't like some of them.''

Brown was skeptical GOP members would support the much larger tax increase in Gillan's measure. He said he may respond with another offer.

It was unclear just how much backing Gillan's proposal has among fellow House Democrats, who have steadfastly rejected Republican pressure to tap the coal trust.

Minority Leader Dave Wanzenried, D-Missoula, said

the caucus had not yet taken a position on the proposal, but added Gillan is not the only supporter.

The development could break a partisan logjam in the House over where to find additional money to pay for crucial government programs that might otherwise be cut or eliminated to deal with a $232 million deficit.

Brown's bill raised $58 million over two years, half from the coal trust and half from an increase in the state cigarette tax from 18 cents to 43 cents a pack. But the trust fund withdrawal requires the three-fourths vote of both Houses, and Democrats have been unwilling to lend the necessary support.

Gillan's bill would take $30 million from the trust fund, but it would be a loan that would have to repaid with interest over 10 years.

She said her proposal raises about $20 million more than Brown's over two years by raising the cigarette tax to 65 cents. About $8 million of that extra money would be needed to begin repaying the loan.

The remaining $12 million would be used for human service programs and education, she said.

Unlike Brown's plan that ends the tax increase after two years, Gillan's bill would continue the higher rate for a decade.

She said the provision of her bill requiring the money to be repaid to the coal trust would be critical for Democratic support.

''It's important to show movement forward while recognizing the need to keep the coal trust intact,'' she added.

Brown said he has concerns that Gillan's package may not be constitutional if it amounts to financing government by creating a debt. He also said the cigarette tax in her bill is too high for Republicans and GOP Gov. Judy Martz to support.

Still, Brown said he was encouraged. ''At least they're willing to come in and address the issue. I hope they don't consider it their best offer.''