The Session Week 14: Piecing The Budget Puzzle Together
As of mid-day Friday, 1,271 bills had been introduced and at least 135 had been signed into law. This week we’re watching how lawmakers are piecing the budget puzzle together. Major questions remain over new taxes cuts, funding state agencies, what to do with federal stimulus and recreational marijuana. Much of this work is under a Thursday deadline for revenue bills, including regulations for marijuana, to move from one chamber to the other.
The federal stimulus in the American Rescue Plan Act has given lawmakers a lot more money to work with this session. Legislators are making plans for how to spend more than $2 billion in a bill nicknamed ‘the beast,’ which has passed the House and is now in the Senate.
Republicans nationally have slammed the federal stimulus bill, which passed Congress solely with Democratic support. State Republican leaders have raised similar concerns over its impact on the national debt while also making plans for spending the money.
“This federal spending is reckless. But here in Montana we’re going to be good stewards of the dollars,” said Governor Greg Gianforte at a press conference last week.
Both Republicans and Democrats are framing the stimulus as a chance to build Montana’s economy for post-covid prosperity.
One of the big spending points state lawmakers have so far agreed on in ‘the beast’ bill is infrastructure, primarily water and sewer projects, as well as broadband connectivity.
Lawmakers have settled on these projects because they’re one-time-only costs that won’t need continued funding after the stimulus money is gone.
In a more controversial move, Republicans have added a section in the state stimulus bill that would let the state cut local government grant funding by 20% if that local government has stricter COVID-19 restrictions than the state. Democrats are accusing Republicans of extorting cities and Republicans are saying that the state needs to move forward out of the pandemic.
Republicans have resisted Democratic attempts to add direct payments up to $2,000 for essential workers into the bill, similar to federal stimulus payments.
The windfall of federal money is complicating the goal of GOP lawmakers and the new Gianforte administration of advancing tax cuts promised during their election campaigns. The American Rescue Plan Act includes a provision intended to keep states from using stimulus money to offset tax cuts.
Montana Attorney General Austin Knudsen has joined 31 states in suing the U.S. Treasury Department over the rule, saying it’s an “egregious power grab” to prevent states from enacting tax cuts.
Lawmakers and Gov. Greg Gianforte have said they aren’t too worried about the rule because Montana is set to see a new revenue stream from taxing recreational marijuana sales, but it’s still unclear how the federal government will enforce the rule and if that will impact Montana.
Three differing proposals for how to regulate and tax recreational marijuana are under consideration in the House, drawing attention for their potential social impact and major budget implications. Lawmakers’ debate is under a time crunch as policy faces a looming deadline to advance out of the House Thursday.