Valley Journal
Valley Journal

Local state rep addresses Pachyderms about budget deficit

POLSON — State Rep. Greg Hertz provided some perspective on the state’s budget deficit at the Lake County Pachyderm Club meeting last week.

Hertz, R-Polson, a member of the House Taxation Committee, said he doesn’t believe things are as dire as the governor’s office has said. 

General Fund revenues increased 14 percent from 2012-2017, Hertz said, while expenditures went up 32 percent. 

Referring to a projected shortfall of $227 million, Hertz said state Budget Director Dan Villa and the governor’s office have proposed some budget cuts. However, Hertz thinks Villa and Gov. Steve Bullock are just trying to scare Republicans into raising tax rates. 

“I’m not convinced it’s as bad as they say it is,” he said. “I don’t remember Governor (Brian) Schweitzer asking for tax increases (when there was a budget deficit). He just did his job, and that’s all we’re asking Governor Bullock to do.” 

Hertz said the state’s rainy day fund is depleted. 

The governor has the power to call the Legislature into a special session at any time, he said, noting there is a huge risk if that happens because the Republicans who control the House and Senate may make cuts that Bullock wouldn’t. Republicans have by and large opposed a special session. 

“We gave a $13 million pay increase to state employees (in the 2017 session),” he said, noting Bullock could halt that or a portion of it and also implement a hiring freeze, for example. In addition, he could prohibit out-of-state travel and limit in-state travel for state employees, of which there are about 12,500. 

Referring to the state Department of Natural Resources and Conservation’s proposal to totally cut the funding for the Flathead Basin Commission, Hertz said the “back story” on this is that the directors of DNRC and Fish, Wildlife and Parks don’t like the executive director of the FBC (Caryn Miske). 

However, he doubts that Bullock will eliminate the FBC’s funding entirely because the Confederated Salish and Kootenai Tribes and the Blackfeet Tribe both oppose the proposed cut. Representatives of both tribes spoke against it before the state Legislative Finance Committee last week, Hertz said. 

The state has lost a number of natural resource extraction jobs in the mining and forestry fields over the years and has shifted to a service-based economy, he said. 

A bill that he proposed in the last legislative session, HB 640, would have instituted a 4 percent tax on all retail sales and services and done away with the income tax. His bill wasn’t heard however. 

Another bill, HB 620, by Rep. Kerry White, R-Bozeman, would have instituted a 2 percent sales tax and eliminated property taxes. That bill died after being voted down 82-18 on second reading on the House floor. 

“We need to talk about a sales tax. We’re in a tourism state,” Hertz said. 

In closing, he said that if residents want to pay more taxes, they can send those dollars to the state and tell them exactly where to spend them. He noted that legislators passed a law giving state residents the right to do this. The website where one can make donations is: https://mt.gov/business/donations.aspx. 

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