Senate GOP leader wants some of federal windfall spent

HELENA - A leading Republican, splitting from the Martz administration's position, said Wednesday the state should spend some of the money it will receive from the federal government over the next two years.

Senate President Bob Keenan of Bigfork suggested a portion of aid should be given to the Montana university system for property tax relief and to trim the size of a $39 million tuition increase for students.

Keenan's proposal came on the same day as Democratic legislative leaders said they want all of the $73 million windfall spent immediately as a means of helping the economy.

''Using this money now makes sense when we've been cutting our budget, cutting services to our neediest Montanans and cutting jobs across the state,'' said House Minority Leader Dave Wanzenried, D-Missoula.

Senate Minority Leader Jon Tester, D-Big Sandy, said some federal money should be used to head off proposed cuts in a welfare program that provides cash payments to the poor.

''This is a perfect example of how we can help Montanans and provide an essential service that can help our neighbors and help provide jobs,'' he said.

Chuck Swysgood, budget director for Gov. Judy Martz, said he still wants the money saved and added to the projected $45 million surplus to deal with any shortage in tax collections.

However, the administration is still studying whether any strings attached to the money require it be spent.

The money is part of $20 billion being made available to the states that have struggled with budget deficits caused by plummeting revenue over the past two years. The aid is contained in a $350 billion economic stimulus package passed by Congress and signed into law last month.

Montana's share includes $23 million dedicated for Medicaid, the federal-state program providing health care to the poor.

The dispute is over what will be done with the remaining $50 million.

Swysgood said the state could get half of that within two days of submitting the one-page certification form to federal officials, something that could occur by the end of June. The remaining $25 million would be available after Oct. 1.

The federal law requires the money be used for essential government services or to cover the cost of unfunded federal mandates.

Swysgood said he considers ensuring an adequate budget surplus to be a critical government service because it can affect Montana's cost of borrowing money.

He also said that saving the money would not require a special legislative session, since existing laws already allow the governor to accept unexpected federal money and designate how it should be used.

Keenan prefers a combination of spending and saving. He wants an undetermined amount used to soften the tuition increase for college students and $100,000 used for a program providing meals to homebound elderly Montanans.

He'd like to see $12 million used to provide property tax relief to homeowners that would otherwise face increased taxes due to the Legislature's change in school funding.

Keenan would set aside $8 million for possible wildfire costs and another $10 million to cover any shortage in government revenue.

He believes such uses of the money could be accomplished through budget amendments proposed by the administration, without a special session.

House Speaker Doug Mood, R-Seeley Lake, sides with the administration.

''I'm in favor of putting that money aside for the time being and seeing what happens to the economy,'' he said. ''It would be nice to put that into an account and see what the economy does within the next year, then decide at that point whether it makes sense to convene and spend it or put it away until the next session.''

The Democratic leaders' call for spending all the money comes on the heels of an identical, almost verbatim suggestion Tuesday by Sen. Max Baucus, D-Mont.

Martz dismissed his advice, saying he should attend to matters in Washington, D.C., and leave this decision to state leaders.