We the People for March 8, 2010
Budget Woesby Sen. Greg Hinkle
Last week the legislature had a one day class on the state budget. It was a real sobering eye opener for all of us. We gave up a day's pay out of the next session to attend. The taxpayers will not get stuck with the additional expense and that is a good thing. Remember when we left the session with a $282.6 million surplus? Well, that has vanished and then some. The revenues are not coming into the state for a variety of reasons. One factor is the unemployed workers. We are right at 8 percent unemployment statewide, but there are some interesting figures. The construction indusrty is running around 32 percent unemployed, transportation and utilities around 25 percent and the finance, insurance, real estate sector about 16 percent. Sanders and Mineral County rates are higher than the state average and the county is not forecasted to improve until sometime in 2012. Non-farm income has dropped 1.9 percent. Currently, the state is spending roughly $20 million more per month than is coming in. Business and individual tax income is declining resulting in a 20 percent increase in refunds; this is data through February. Corporate taxes are off 70 percent and refunds to them are running over 45 percent. Montana is fourth highest in the nation for debt per capita. You can see the picture. Not since the Great Depression has Montana been faced with a fiscal crisis like this. Obviously, this is new territory for all of us. In a nutshell, we are looking at a shortfall of $365 million for the next bienium and that figure does not include an additional $100 required cushion. Then there is the $200 million of one time stimulus money that was used to fund programs. Where is that continued funding going to come from? Now think about the $3 billion in unfunded liabilities in the pension funds. That is enough for the bad news; so I'll give you the good news. The economy is projected to level out and very slightly improve. Forecasters are basing this projection on ... speculation! No real trends to base the projections.
I will give you a good example of how some of the stimulus money was used. There was $50 million removed from Medicaid to fund the Healthy Kids Initiative. The funds taken from Medicaid were backfilled with stimulus money, a one time deal. Now we will have to find the $50 million to fund Medicaid. Top that off, remember we were told that 30,000 of Montana's kids were now going to have insurance. Well, after hunting for them, they found 2,000. I will add that I did not vote for all this shuffling of funds nonsense.
In order to get this budget fixed, we must look at how we got here. For one thing, the Governor has increased state expansion around 48 percent with the consent of your previous legislators. You can not put the blame on any political party because they all have been doing the same thing, growing government. Now we are forced to change direction and I view that as a good thing. I hear some legislators say we must decrease spending. I heard some say we need to find ways to raise taxes, and some said do both. I will not support an increase in any taxes. The expansion of government in Helena is where the paring knife should be applied. My income has declined and my spending has declined. The State should do the same.
The Governor is making cuts of 5 percent and he can cut another 5 percent. Any more than that and he will have to call a special session. He will avoid that if possible. I do believe we are going to end up with reductions of around 20 percent before all of this is over. Any way you slice it, the 2011 session is going to prove interesting.
I have heard some talk of the state looking for more federal money. The federal government has lots of it; they can just print more. I have in my wallet a $100 trillion bill. Yes, you read that right and it is real money. It is the largest denomination bill in the country of Zimbabwe where a long distance phone call will cost you around $10 trillion. How did they get there? By printing more money. This inflation wipes out the savings of the people and drives them into poverty. You can bet I will oppose using federal money.
If you have questions about any issue, give me a call Monday through Saturday at 827-4645 or email me at ghinklesd7@gmail.com.
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