Legislative leaders visit Havre on statewide tour

Republican legislative leaders touring the state to talk about the recent session encountered some resistance today from a member of the Board of Regents.

The group - House Speaker Doug Mood, House Majority Leader Roy Brown and Rep. John Witt, R-Carter, met with about 15 people in Havre this morning on their first stop of a tour of the Hi-Line. The group has already held meetings in 30 Montana towns to give their take on the session, which ended April 26.

The lawmakers told the group that the Legislature had successfully balanced the budget without making any major tax increases, while reducing other taxes to help the economy grow once the nation's recession ends.

People who attended asked about an income tax cut approved by the Legislature, as well as tax increases on rental cars and motel rooms.

Montana State University-Northern teacher Cameron Worstell noted that public school enrollment is shrinking and asked how the Legislature will respond when that enrollment decline affects the state's universities.

Mood, R-Seeley Lake, said the way to help the universities is to increase Montanans' income by improving the economy.

Brown, R-Billings, added that the Legislature kept university funding at the same level as the last biennium, although he noted that inflation will likely require tuition increases.

"The problem is the combination of civic duty and fiscal responsibility. I think we balanced that pretty well this session," he said.

Witt said changes adopted by the Legislature have made the Board of Regents more involved in the budgeting process. That will make it easier for the Legislature to track university expenditures, he said.

"It's virtually impossible now to track where the dollars go," he said.

Lynn Morrison-Hamilton of Havre, vice chair of the Board of Regents, disagreed. The Montana University System is subject to the state audit procedure like any other state agency, she said.

"I believe we are accountable to the people of Montana," she added.

She also disagreed that the Legislature had minimized tax increases. Montana university students and their parents are taxpayers, and many of them consider tuition increases the same as taxes, she said.

The Board of Regents is considering increasing tuition by 20 percent or more because of the lack of state funding for higher education, she said.

"They're facing the largest tax increase in the state because of the session," she said.

Morrison-Hamilton noted that Montana ranks 42nd in the nation for average tax burden. But the lack of spending on infrastructure and on education makes it very difficult to attract businesses to the state, she added, and asked the Republican lawmakers to respond to the issues she raised.

Brown said the Legislature raised the amount available in financial aid for lower-income students to help mitigate the tuition increase. Many university foundations are doing the same, he said.

Brown, Mood and Witt agreed that the Republican move to roll back the budget to 2000 levels on the first day of the session was a good move.

"In 10 minutes we balanced the budget of the state of Montana. (That move) had never been done before," Brown said. "Instead of having to justify decreasing budgets, we put the agencies in the position of having to justify increases."

Brown said many people have said the Legislature failed to find any long-term solutions, just short-term fixes. That depends on what the definition of long-term fixes are, he said. Some people seem to think long-term fixes are large, permanent tax increases that will cause government to grow, he said.

"If that's a long-term solution, then we failed miserably 'cause that's not what we did," he said.

Mood said the Montana Legislative Fiscal Division, the governor's Budget Office and the "prognoscitators of the federal government" all predict the recession caused by the terrorist attacks on Sept. 11, 2001, will be over by 2004. At that point, the Montana economy should supply enough revenue to fund the budget, he said.

The Legislature faced a projected $230 million budget deficit at the start of the session.

Until then, the Legislature used one-time money sources and tax increases on tobacco, motel beds and rental cars to fund the 2003 budget, he said. Once the economy improves, the tax increases will make up for reductions in income tax rates, effective in 2004, he said.

"With what we're being told, I think we'll look back on the session and say we did the best that we could do," Mood said.

Brown said the Legislature also took steps to improve the tax situation, especially income tax rates and capital gains rates. The state's high rates have kept businesses from coming to the state, and driven others out, he said.

"I think it will be very helpful in the long run," he said. "Overall, I think we did a very good job with the situation we were under."

The Havre stop was the 31st on a tour of the state, Mood said. The tour was to stop at Chester, Shelby and Cut Bank later today.