Budget cuts: Montana needs new revenue or faces “a generation of recovery”
Reading the news, there has been no shortage of stories about the consequences of recent state budget cuts – hundreds of jobs lost, services that people need eliminated, and communities reeling from the damage.
Since the start of the regular 2017 legislative session, the Legislature has cut nearly $100 million from health and human services. Unlike most other parts of the budget, state general fund reductions to health and human services come with a loss of federal funds. When totaling up all funds, we estimate that Montana families have lost more than $200 million in health services.
Nonprofit organizations across the state have announced layoffs and the reduction or elimination of services. These are the groups that help abused children, at-risk moms, and people with disabilities. To keep going, many organizations are turning to their communities for donations. In the worst-case scenarios, some are simply shutting their doors. Story upon story paints a picture of families grappling with how to access the help they once had and need.
The long-term results of these cuts will ripple throughout our broader economy. When jobs are eliminated, people spend less, which hurts businesses. Productivity suffers when workers have to take time off to care for family who lost services. When people are forced to operate with uncertainty around their health, their job, or their family’s welfare, they pull back from their involvement in schools, volunteering, and community activities. When those suffering with mental health or addiction disorders don’t have services, they often end up in crisis, putting pressure on emergency rooms, firefighters, and police officers. Children can end up in foster care – which costs the state additional resources for child and family services.
And while health and human services took a disproportionate share of the cuts, the reductions impact nearly every part of the state budget. The state’s water monitoring has been disrupted so fishing guides and farmers can’t do their jobs to watch river flows and irrigate their lands.
Cuts to our correctional system will shift costs to county jails. Public defender reductions will mean longer jail holds that are more expensive to the state. Schools are turning to local property taxpayers to fill holes in their budgets to simply upgrade curriculum and improve unsafe buildings. Our universities have increased tuition, making it harder for families to send their kids to college and grow Montana’s workforce.
We need only to look at Kansas to see where Montana is headed. Years of deep cuts have wreaked havoc on their state. As one Kansas advocate puts it, “There isn’t any kind of area of life or population or part of our state that didn’t feel this in some way. This isn’t about recovery in a decade … This is about hopefully recovering within a generation.”
Before we reach the levels of damage seen in Kansas, we must come together and find common ground. There is a solution. We cannot restore these cuts with a mere uptick in revenue this year. To fill the deep holes and realize new opportunities that move Montana forward, our state needs new revenue.
We must look at our tax system as a whole and find ways to close loopholes for special interests and tax cuts that don’t benefit most Montanans. There are options to bring in new revenue and make our tax code fairer. We can restore a top tax bracket that would impact only the wealthiest with incomes in excess of $500,000 annually.
We can close loopholes that advantage large corporations shifting profits offshore. We can level the playing field for workers by taxing investment profits the same as wages. These are reasonable ways to raise revenue without asking those who can least afford it to continue to shoulder the costs.
We deserve a state that can address tax fairness and adequate revenue to build strong Montana communities. We can and must do better. This is a long-term issue that needs a long-term solution. We all pay for not investing in our state.
Heather O’Loughlin is the co-director of the Montana Budget and Policy Center.