HELENA — Gov.-elect Steve Bullock Friday proposed some changes to outgoing Gov. Brian Schweitzer’s earlier budget recommendations, but retained the proposed expansion of Medicaid, the federal-state health insurance program for poor and disabled people.
Until Friday, Bullock had been noncommittal whether he supported expanding Medicaid.
Bullock said the Medicaid expansion is part of a broader package he proposed called “Access Health Montana” to increase health care coverage for more Montana families. It also calls for partially funding the education of more Montana medical students and boosting physician residency programs.
If Montana expands Medicaid, 60,000 low-income Montanans would be added to the program in 2014. The federal government, under the 2010 federal Affordable Care Act, will pay for nearly all of the costs of Medicaid expansion from 2014-2017 and most of the costs in following years.
Some major changes Bullock proposed to the Schweitzer budget are to add campaign pledges he made last year.
One would give Montana homeowners a one-time, $400 property tax rebate, at a cost of $100 million to the state treasury.
Bullock also called for eliminating the property tax on business equipment for 11,000 Montana businesses, by exempting up to $100,000 of equipment from taxation. That would cost $10 million over two years.
“This budget is a reflection of tens and thousands of people that we talked to during the campaign,” he said at a news conference in the Capitol. “But even more than that, we believe it’s a reflection of Main Street, Main Street Montana, their hopes, their needs and their values.”
Montana is in better financial shape than nearly any state, he said. That allows the state to invest some of the money, save some of the money and return some to taxpayers, Bullock said.
The tax plans and Medicaid expansion may face tough sledding in the Republican-controlled 2013 Legislature.
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GOP leaders have said in recent weeks that they want to provide broader property tax reductions for homeowners and cut the tax rate on business equipment for all businesses, rather than raise the threshold to help some.
They also have voiced concern over the future potential costs for the state if it expands Medicaid.
Bullock said he is “more than happy” to meet Republicans halfway on the issues.
Incoming Senate President Jeff Essmann, a Billings Republican, said he’s “optimistic that we can work with the governor-elect to find some common ground.”
However, he said given the fiscal problems facing the federal budget, the state needs to be “very conservative” in making new commitments with federal money.
Bullock also threw his support behind Schweitzer’s plan to freeze tuition at state colleges and universities and backed a pay-plan deal negotiated by Schweitzer and public employee unions, to give state workers 5 percent raises in each of the next two years.
However, Bullock modified Schweitzer’s plan to fix Montana’s public employee pensions, which face a potential long-term shortfall exceeding $4 billion. Bullock would pump more natural-resources money into the funds, plus require employees and employers to contribute more.
Local government groups, which opposed the Schweitzer plan because of the fear of higher local property taxes, support Bullock’s revised plan because it boosts the amount of natural resources money targeted for the pension funds, he said.
Bullock said he would fund his proposals by reducing the state surplus to about $300 million, down from the $400-plus million proposed by Schweitzer.
His other proposals include a $15 million grant pool at the state Commerce Department to help eastern Montana communities address the impacts of oil and gas development, increased state payments to public school, and a $5 million expenditure to ensure students can transfer their credits from one college or university to another through a universal enrollment system.