- [Coffin] Happening now on The Rundown.

- What do we want?

- Freedom!

- When do we want it?

- Now!

- [Coffin] Tense moments in the Capitol as controversial legislation begins the journey through new chambers.

And I call on experts to break down the biggest bill of the session.

- This money could have huge impacts on the state of Montana going forward for a long time.

- [Coffin] The Rundown is made possible by the Greater Montana foundation.

Encouraging communication on issues, trends, and values of importance to Montanans.

The Rundown Capital Report takes place primarily in Helena which is the original land of the Sailish, Pondera, Blackfeet, Shoshone, Bannock and Epselica people.

Welcome and thank you for joining me again in Helena for another installment of the Rundown Capital Report.

We just wrapped up the 11th week of the 67th legislative session and Montanans came to their Capitol to have their voices heard on a variety of issues.

This week, I'll break down bills on LGBTQ rights, then a couple of my journalism colleagues, Eric Dietrich with the Montana Free Press and Holly Michaels with Lee Newspapers, will join me on the show to break down the biggest bill of the session, the budget.

Let's begin.

On the steps of the Capitol were protestors gathered Monday to rally against anti-LGBTQ legislation moving through the session.

- Whose house?

- Our house!

- Whose house?

- Our house!

- LGBT Montanans belong in Montana.

(crowd cheering) And I hope that all my LGBT brothers and sisters hear this and see this show support and realize that they can stay home.

They can keep this home and we'll all fight together.

- [Coffin] Moving through the 67th legislative session are a handful of bills targeting the LGBTQ community.

Three standouts, House Bill 112, House Bill 427 and Senate Bill 215.

House Bill 112 requires student athletes from kindergarten through college to compete in sports based on their sex assigned at birth.

It's companion bill, House Bill 427, prohibits transgender minors from accessing sex altering or gender affirming surgical and medical procedures.

- For fairness, we create categories for sports based on age and sex as well as weight, experience and skill.

Being transgender should not be a basis for discriminatory treatment based on gender, but sex-based rights are based on sex not gender.

Females are not disadvantageous versus males in sport because of their gender or their gender identity but because of their sex.

Gender is irrelevant to sport, but sex is not.

- [Coffin] Both bills were heard in the senate judiciary committee Monday after passing through the house by transmittal deadline.

- We've got a lot that want to testify on some bills today.

So with that, we will start with House Bill 112.

Representative, welcome to the committee.

- [Coffin] Both bills carried by representative John Fuller, a Republican from Whitefish, have drawn a lot of attention from the on start of the session, including Monday's rally.

- They can't discriminate against us!

- [Crowd] No!

- They cannot go after our trans kids!

- [Crowd] No!

- They can't keep us from playing sports!

- [Crowd] No!

- [Coffin] Representative Fuller says he's carrying the bills not to attack the trans community but to protect women and children.

- Children live under the guardianship of adults precisely because they lack the maturity, prudence and experience to make safe and responsible decisions for themselves.

When gender dysphoria is in the mix, these decisions can have lifelong consequences.

Gender transition involving major surgeries not only results in sterility but other irreversible negative and biological effects.

Society in Montana has a vested interest in protecting its children from potentially dangerous actions.

We do not allow children to make many kinds of unhealthy decisions.

Smoking, drinking, child pornography, sex with adults and illegal drug use just to list a few.

The freedom to make decisions does not allow us to determine the consequence of these decisions.

And children should be free from either parental, peer or cultural pressure to deal with their gendered confusion or their body dissatisfaction by starting down a one-way road to lifelong medical intervention.

A child experiencing body dissatisfaction needs care, counseling, compassion and guidance addressing the real cause of the distress.

Protecting children from surgical procedures that are purely cosmetic and irreversible is necessary and proper.

For those that claim that this bill is injecting government into the sacred relationship of a family and their health provider, I would argue, that is a false premise.

Health professionals take an oath to do no harm and altering the physical appearance of a child without their majority consent is unconscionable.

Opponents to this bill will tell you that it is discriminatory, an invasion of privacy and will be indefensible in court.

Those are red herrings designed to direct attention away from the real issue.

The real issue is that of subjecting children, children, to irreversible cosmetic and life-changing surgery before they are an adult and responsible for their own future is what opponents are advocating.

The state of Montana has the responsibility and the right to protect children from such abuse and I urge a due pass from the committee, thank you.

- [Coffin] The third piece of legislation protestors urged lawmakers to vote down is Senate Bill 214, the Religious Freedom Restoration Act.

This says the government should not burden the freedom of religious practice without compelling justification and provides legal protections for those whose religious expression is substantially burdened by the state.

Senate Bill 214 is carried by Senator Carl Glim, a Republican from Kyla and was heard in the house judiciary committee last week.

SB 215 effectively takes Montana back to where it was before non-discrimination orders saying businesses have the right to deny services based on their religious beliefs.

Testifying in support of these bills was Montana's new lieutenant governor, Kristin Juris.

- Do we need this in Montana?

Yes, we do.

You have heard the list of cases and there are many more where state or local government has taken actions that have unduly burdened the exercise of free religion.

I was the faculty advisor for the Christian Legal Society, the only group ever banned from the law school at the University of Montana.

That was devastating to those students who were told that their values were not going to be protected.

They were not allowed to express their beliefs in the same manner that the democratic club, the Republican club, the environmental club and all of the other clubs that were allowed to participate in the school were allowed to do.

Governor Gianforte emphasizes, this is not a license to discriminate against the LGBTQ.

They are hired as employees across the state.

It is not a license for lodging facilities or private employers to discriminate.

And we would request that you affirm and vote positive on SB 215, thank you.

- They said over and over and over again, this is not about LGBTQ discrimination.

We know that's a lie!

And they are doing incredible mental gymnastics trying to say it's not about us.

Guess what?

We know.

Guess what?

We're here!

Guess what?

We're not going to shut up.

(crowd cheering) - [Coffin] On Friday, the bill passed 12-7 out of the house judiciary committee.

Right now, the legislature is dealing with three large packages of funding, the Budget House Bill two, the legalization of recreational marijuana and this week, $2.7 billion in federal stimulus funds from the recently passed American Rescue Plan Act of 2021.

While the state budget and legal marijuana were anticipated early on, the stimulus funds were not.

This week, a new joint joint sub committee started meeting to discuss what to do with it.

To buy themselves more time to talk about it, legislative leadership had been shaving off Saturday session days and last week announced they will extend this session from meeting until April 30th to May 11th.

The extra legislative calendar days will give them more time to figure out where to put the massive amounts of stimulus money.

The state budget on the other hand is something legislators have been working on since day one of session.

House Bill Two, called simply the General Appropriations Act is carried by representative Lou Jones, a Republican from Conrad who has served in the legislature as both a representative and a senator since 2005 and is now on his ninth session.

House Bill Two is the focus of the House Appropriations Committee and several subcommittees devoted to different subject areas like education, healthcare, law enforcement and justice and long ranged planning and more.

But this week, the committee voted the bill out of its hands sending it up to the house floor scheduled for its second reading this Monday, March 22nd.

Now obviously, this is a big piece of legislation with a lot of different components and moving parts.

And to help explain it to you, I've invited two Capitol reporters onto the show to break it down.

Eric Dietrich with the Montana Free Press and Holly Michaels with the Montana State News Bureau.

Thank you both for joining me.

I guess I'll start by asking Eric, where are we at in the budgetary process and what did it take to get here?

- Right, so the first thing to know is that the budget is a two year process, they set it two years in a time because our legislature meets every other year.

And so, legislature meets in odd years, previous two years of budget.

And the process actually kicks off in even years with the governor that the governor comes in and sets the executive budget, kind of a proposal that the lawmakers work off of as they're crafting their version of it.

So that started last fall actually with then governor, Steve Bullock, a Democrat.

Of course we have our new governor, Greg Gianforte, a Republican who came in and took Bullock's proposal, tweaked it to make it his own and then presented it to the legislature.

- This is the first time in 16 years we've had a Republican governor and there's been a lot of anticipation for a fiscally conservative budget.

How does Gianforte's budget match up to this expectation?

- I think in some ways it does.

It's still pretty early in the process but Gianforte released his budget in really early January and his budget has about a hundred million dollars less in general fund spending than the previously.

Was it Bullock's budget?

- In Bullock's budget, yeah.

- So his budget has about a hundred million dollars less in general fund spending than the budget that was left by the previous outgoing democratic governor.

So there's a little bit of a reduction there.

But overall, it's a little bit of a reduction, he planned to hold spending flat, that's what he campaigned on so that's sort of the point.

It does rely on a lot of tax cuts too that are in their (indistinct) I don't know if you want to go into those or?

- Yeah, so I think there's an expectation and particularly, I think on some people in the left that Gianforte campaigned as a conservative, is a conservative and he was going to come in and kind of do something like what we saw in Kansas 10 years ago, right?

The Kansas experiment where governor, the Kansas experiment where governor Sam Brownback famously came in, said, we really want to cut taxes a bunch, cut spending a bunch, stimulate the economy, supply side economics, all that stuff.

And famously, it didn't work out so well for Kansas.

They ended up with a major budget crisis and school cuts that were really painful.

Eventually it backpacked on the tax cuts and kind of came away with the whole thing with a black eye.

And so in some circles in Montana, there's been a fear that we would see that under governor Gianforte's administration.

But his proposal really wasn't that, possibly because we're in the middle of a pandemic.

He came in and it's like, actually slight spending increases over what we had last budget cycle.

About 3%, depending on how you look at the numbers.

And so it's smaller increases than what Bullock had proposed previously.

- And how does governor Gianforte's budget meet up with what the legislature is working on now?

Have Republican legislators taken those budget cuts further than what his office proposed?

- I think it's hard to say straight out but the legislature has made some changes to what Gianforte proposed.

Some programs that he wanted to create, kind of most notable I think is the Heart Fund which we do community-based substance use disorder treatment.

Gianforte wanted to have that program be a part of his budget.

Through the legislative process where we are now, legislators have decided not to fund that.

They want to know a little bit more about the policy.

So that's one piece where they have spent less than what he proposed.

Another, there's judges that he wanted to put into flatten (indistinct) counties.

The legislature initially said no to both of those positions and has built one back in.

Similarly, Gianforte wanted 14 new parole and probation officers and the legislature has only funded about half of those.

So the legislature generally does kind of pare back from what the governor's proposed and then we see that process ebb and flow a lot through the sessions still.

- It's worth noting that the legislative appropriations process is really a multi-stage thing.

Like, they've got committees and subcommittees and then vaults in the full house and senate floor.

So there are actually five or six decision points in the process, depending on how you count.

And so we're through, depending on again, how you count, two or three of those.

And so some things have come back in, some things have been taken out.

There's room for more of those to swing around again as we see this coming week.

This coming week, we're going to be seeing the budget most likely on the house floor.

And so that will be an opportunity for everybody to come in, all hundred representatives to come in and say, "Well, I think the budget should be like this," offer up an amendment, have the group take a vote on it.

And so we'll possibly see some tweaks again there as is the case in every stage in the process here.

- So let's talk about the balance of power in this budgetary process and negotiations.

Republicans outnumber Democrats both in the house, in the senate but Democrats play a key role in passing this budget too, Republicans really do have to work with Democrats to get it passed.

How does that balance of power between the two parties work in the budgetary process, at least in this session?

- So the budget that we have now, actually the last major vote we had on it was in the House Appropriations Committee and that was actually bi-partisan both ways.

Some Republicans voted for it, some Republicans voted against it.

I think they lost at least one Dem, two on that.

So like, there are differences of opinion and it's still early in the process.

But the reality is the Republicans have control when all the Republicans agree but when the Republicans run into some issue where there's a philosophical difference or they just disagree with each other, then a portion of the Republican party can vote with the Democrats on a committee or in a full chamber floor vote and get their way.

And so the Dems do have political power, they're minority but they do have political power depending on the situation.

- Yeah, I think there's been some pretty interesting votes in the House Appropriations Committee too.

I think a lot of what we're talking about this session is how much power that solution's caucus' sort of moderate Republican group has.

And in, I would say I saw on the House Appropriations Committee, there are a lot of proposals that were maybe a little further right that died on a 12-12 vote, so it showed that that moderate faction can work with Democrats to stop legislation at least within that committee.

I'm really curious to see how that plays out on the full house floor, if we see some of those proposals may be brought back that died in committee and if they might meet better reception on the house floor.

So I think it's kind of an interesting early sign of how that moderate group is doing.

And we'll see a lot more next week as to what their strength might be.

- And for example, one of the proposals that happened too was a vote to strip some funding out the need-based higher education funding college scholarships or state schools.

And some of the Republicans thought that was a good way to use state money, some Republicans kind of felt that no, let the private alumni donors do that.

So you just had a difference there that manifested itself.

- There's been a lot of attention paid this session to funding for the Department of Health and Human Services, early on it was stripped out, it has since been restored, mostly.

Holly, you wanted to point out some other changes in the budgetary process to Medicaid services for Montanans that are real are worth noting and important to know.

- Yeah, I think the state health department is the largest agency in Montana so it gets a ton of attention through this process.

It's about a $6 billion budget that they're working with.

So a huge amount of money, a lot of that is federal funds, it's definitely not a majority of state dollars but still, a huge amount of money.

One pretty big change they made is they made a 3% reduction in their Medicaid caseload.

So this is the estimate of the number of people they think 'cause this is all a guess.

So how many people they think will need Medicaid services.

There's been some concern from the health department that they're basing that number off a projection that has already been updated and it looks like we're going to have more people needing services than we thought.

So they're a little worried that they might be coming in low.

And the issue is these are entitlement programs so you can't deny people those services.

So people will still go out, they'll get healthcare and then they might be in a position of coming back and asking for a supplemental in two years saying, "Hey, we didn't have enough money.

We need more to make our budgets."

So that's a pretty big piece of it, it's a pretty big chunk of money that looks like a savings but if they need the money, they need the money so they'll come back for it.

There's another piece that's pretty interesting called continuous eligibility which in Montana under Medicaid, if you are approved, you're approved for a year.

And that's a part of our waiver that we have and because of that, we get a little slightly lower federal match rate.

So for Medicaid expansion, generally, the federal government pays 90% of those costs, the state pays 10.

Here it's 89-11 because we have that continuous eligibility.

And the assumption is because you're not constantly having to go see if people are qualified or not, you save a little bit of money just administering that program.

There's a separate policy piece moving through to get rid of that money or that policies that wouldn't have continuous eligibility which will be bringing more federal dollars and relieve some of the pressure on the general fund.

But Democrats are pretty opposed to that saying that for the amount of money that you'd save, they basically call it budgetary dust, it's such a small amount of money and we put a fair amount of Montanans in this sort of churn where they might be qualified and their not qualified and have to go through reapplying and that sort of issue.

So that's another pretty interesting piece there.

- What about the stimulus?

- Yeah.

- It's a lot.

- It's big.

- Yeah, it's a lot of money.

- Yeah.

Yeah, again, depending on how you count, it's been described as like almost another year of general fund spending for the state, like $3 billion coming in, not all of which the legislature will get to appropriate but definitely like a big pile of cash for them.

- [Coffin] You both have covered the legislature before.

Have you ever seen the legislature deal with this second amount of funding?

This type of big package of funding after the budgetary process?

- No and one legislator today sort of framed it as this might be the biggest thing we do in our time as a legislator.

Even if you serve several terms, this money could have huge impacts on the state of Montana going forward for a long time.

Like Eric was saying, it's basically another general fund budget that they're managing.

And it's a little tricky right now because some parts of money have pretty clear definitions about how they can be spent but some, and I'd say a fair amount don't.

So they're not only creating basically a second budget but doing it without having clear rules about how some of that money can be spent.

I think that most parts are about a four year timeline so there's some flexibility, you've had economic fallout from COVID in Montana, just the human costs and there's a lot of urgency to get money out the door to help the economy, to help people but not a lot of cleared in how specifically it can be done.

So it's a pretty interesting process I think to watch right now for me at least covering it just because I'm often confused in budget hearings but it seems like everybody else is right now too.

- It's kinda nice to not be alone, yeah.

- So it is I think, money.

I mean, just one of the broadband proposals could dramatically do work that this body's been trying to do for a long time and all of a sudden all of the money might be there.

- They think they can put maybe $350 million toward it, which is.

Like the state court system costs $100 million dollars a year to run.

Like, just incredible, yeah.

- [Coffin] We also have marijuana funding coming in.

- We do, yeah.

Finally got to look at the text of that bill this week.

- It's going to be pretty interesting I think, the way it's structured.

There's always been this frustration, I think we're seeing that put into the bill now.

The ballot initiative is written in a way to put a lot of money toward public lands, outdoor uses, those sorts of things and that doesn't appear to be where it's going to go now.

There's some money going to sort of three pots, trails to non-game animals to, I think another piece of outdoor access but all those three pots are capped.

It looks like at about $650,000 each.

It does look like about, sorry, about 6 million of that is going to go to the Heart Fund.

About half a million of that will go to Indian Health Services.

And then it looks like a lot of the rest of it is just going to flow into the state general fund.

So there's a lot of tax cuts being proposed that will reduce our revenue, that might sort of backfill it.

There's an interesting piece that I think is really not clear yet with the federal COVID aid coming in.

There's a provision where it looks like states can't reduce, have a net reduction in their revenues and still receive the money.

The legislature is still trying to put together and get a legal opinion to really understand what that means but there's some concern that if these tax cuts go through, we would need something like that pot revenue to offset them so we don't have a net revenue reduction and are still eligible for that money.

But I think a lot of that still really isn't very clear yet.

- Pretty up in the air so.

- [Coffin] So this is, I mean, uncharted territory for legislators, even those of whom are serving on the appropriations committees and are familiar with doing budgets, have done it in sessions past but now they have two new big chunks of spending that our state hasn't seen in a long time.

- Yeah, the other thing to remember is this isn't the first round of stimulus money the state has gotten, right?

We got the one and a quarter billion dollar COVID relief fund under the Cares Act a year ago that was actually administered in primarily where the governor's office.

And then we also got another stimulus package, the one that passed at the end of the last year.

That directed about a half a billion dollars into Montana.

And so there's actually a bill going through that would appropriate a bunch of that money to right now but half a billion dollars, that portion of the half billion dollars is like small potatoes compared to this other stimulus bill so nobody really has time to think about it.

You're looking at probably close to four and a half, $5 billion total in stimulus money that's come through the state just in the last year.

Of course, also in a once in a century crisis but it's just an unprecedented amount of money.

- You know, Eric was talking about there was COVID money that came to Montana before and a lot of lawmakers, especially Republicans were really frustrated they didn't have their fingerprints on that money.

So there's a lot of desire to have as much legislative involvement as possible in the timeline they have.

So there's this huge push and I think it's really strong.

Just feels like a buzz to get going on it but have their fingerprints all over it.

- Yeah.

Well, it really is a unique opportunity for the state too because the most flexible chunk of new stimulus money that's coming in is a $910 million chunk that's nominally designed to help states backfill budget crunches that are resulted from COVID.

Economic impact, reduces income tax collections and so therefore even with the budget crisis.

As it turns out, our budget's actually in pretty good shape, in part because we have full rainy day accounts, in part because they're projecting a very sharp, kind of returned to normal as soon as this vaccine gets distributed.

And so, it's essentially kind of unspoken for money.

It's not like we need to take the stimulus money and use it to prevent layoffs at the Department of Health and Human Services.

It's money that's available to be invested in what lawmakers think are the right things to build the economy and keep the state going forward.

- I think it'll be really curious to see where they put the money toward and how much they set aside given that I think it is a pretty optimistic return that they're expecting in their revenue projections and if we realize that or not.

So I think, to be kind of watching that as an interesting part as we move forward, seeing where revenues do land 'cause Eric's right, we're not as in rough shape, I think.

And so we're hearing a lot about, can this money go toward infrastructure projects that are kind of there, they've already been vetted?

Water, sewer, those sorts of things.

There's always a long list of those projects that people want to do.

- Yeah, there's also a desire to spend a big chunk of it on broadband 'cause that's seen as an obvious economic development, investment will be made.

- [Coffin] And has support from both parties, that's a priority for Republicans and Democrats is expanding rural broadband.

- Right, yeah.

- Yeah.

- Well, is there anything else either of you would like to add or you think is important for people to know in trying to just get their heads around this budget and what it means to our state?

- I would say this session especially 'cause it's being held under this hybrid model, there's more opportunity I think for public participation, you don't have to come tell in it, you can testify remotely.

So you can watch this bill from the legislative homepage.

You can look up online how to testify, you can submit a written testimony.

You can sign up the day before to give testimony to a committee.

So if you've got thoughts on how this money could be spent, either just the regular hospital two process or this COVID money, you can definitely make your voice heard.

- [Coffin] Wonderful, and where can people find both of your work?

- Any of the newspapers that I write for.

So Helen Independent Record, Billings Gazette, Missoulian, Revalue Republic, Montana Standard.

- And with Montana Free Press, we're online at montanafreepress.org.

- [Coffin] Wonderful, thank you both for being here so much and sharing your knowledge about this budget, I really appreciate it.

- Thanks Jackie.

- I hope we made it a little bit less confusing for people.

- That's all the time we have this week on the Rundown Capital Report.

If you would like to get in touch with me, my email is jackie@montanapbs.org.

I would love to hear from you.

See you next week in Helena.

The rundown is made possible by the Greater Montana Foundation.

Encouraging communication on issues, trends and values of importance to Montanans.