HomeMy WebLinkAboutSpecial Session of LegislatureMar~
From: Alec Hansen [mlct~mt.net]
Sent: Thursday, August 15, 2002 10:26 AM
To: Town of West Yellowstone; Town of Wibaux; City of Troy; City of Townsend; City of Big
Timber; Town of Terry; Town of Superior;, Town of Sunburst; Town of Hot Springs; City of
Sidney; Town of Sheridan; City of Shelby; City of Scobey; Town of Richey; City of Poplar;,
City of Wolf Point; City of Plentywood; Town of Plains; Town of Philipsburg; Town of Fort
Peck; Town of Manhattan; City of Malta; City of Red Lodge; Anaconda-Deer Lodge; City of
Livingston; City of Libby; City of Lewistown; City of Laurel; Town of Joliet; City of Havre; City
of Harlowton; City of Hardin; City of Hamilton; City of Glasgow; Town of Geraldine; City of
Forsyth; City of Three Forks; City of Thompson Falls; City of Columbia Falls; Town of
Fairfield; Town of Eureka; Town of Ekalaka; Town of Drummond; City of Dillon; Town of
Denton; City of Baker, City of Cut Bank; City of Belgrade; City of Fort Benton; Town of
Bddger; Town of Twin Bridges; Town of Broadus; Town of Brockton; Town of Browning;
Town of Cascade; Town of Chester; City of Cboteau; Town of Circle; Town of Virginia City;
City of Colstrip; Town of Columbus; City of Conrad; Town of Darby
Subject: special session of the legislature
dear members:
i have attached a short report on the results of the special session of the
legislature that concluded early sunday morning after working six days to
fill a $57 million hole in the state budget, cities and towns were not
damaged, but these six days were just a preview of the regular session when
the legislature will be trying to figure out what to do about a $200 million
deficit.
best wishes,
alec hansen
Montana League of Cities and Towns
Special Session of the Legislature
The Legislature met in Special Session August 5-10 to patch a $57 million hole in the
state general fund. The budget was balanced after six days in hell through a combination
of spending cuts and fund transfers, but good to know that all of the financial slashing
and shuffling did not touch cities and towns.
The League focused on the following three bills during the Special Session:
Senate Bill 10 would have suspended the 3% growth rate in the local government
entitlement program. The measure would have reduced payments to cities, towns and
counties by more the $12-million over the next three years. It would have left local
government budgets so far behind that they would never have caught up in the race with
inflation. The League and representatives of counties and other cities argued that the
entitlement program, which was approved by the Legislature in April of 2001, was a trust
agreement between the state and local governments that should not be abrogated by the
Legislature. Cities also pointed out that the state is earning a profit on the program
because of accounting accruals and the accurate projection of gambling and motor
vehicle taxes and other local revenues that were transferred into the general fund. The
bill was tabled by a unanimous vote in the Senate Taxation Committee.
Senate Bill 13 was intended to clarify a break that was given to computer soft-ware in a
1999 law that generally exempted intangible property from taxes. This law reduces state,
local government and school district levy revenues by more the $14-million a year, which
is substantially higher than the amount estimated in the fiscal note. SB-13 would have
cut the losses by $8-million. The issues involved in the taxation of intangible property
were a knot of administrative roles and assessment procedures. It was not practical to
deal with all of these complications in the time available last week. The bill was tabled
in the Senate Taxation Committee.
House Bill 18 made technical corrections in the Local Government Entitlement Law. It
reduced the growth rates for counties and consolidated governments to the percentages
agreed to by the 2001 Legislature. It also adjusted the formula used to reimburse schools
for motor vehicle revenues that were transferred to the state. The growth rate for cities
and towns was held at 3% in accordance with the intent of the original law. The bill
boosts state revenues by more than $4-million this fiscal year without affecting municipal
budgets.
An attempt was made on the final day of the special session to penalize local
governments that pass ordinances or resolutions that diminish the flow of gambling taxes
or other revenues that now go to the state under the provisions of the "Big Bill". The
financial coercion implicit in this bill was aimed at Helena and the smoking ban the city
enacted by initiative in June. The Senate rejected this amendment Saturday morning
by a 28 to 20 margin.
The Special Session was quick and deadly. Cities and towns suffered no damage, but
these six summer days are an omen of the wicked things waiting for all levels of
government next winter when the budget deficit is expected to be more than $200
million. There doesn't seem to be enough money to go around in Montana, and the
Legislature is going to have to raise taxes, raid trust funds or ravage agencies and
programs to balance the budget for the next biennium.