HELENA – Gov. Steve Bullock announced Wednesday that Montana’s budget picture has improved enough that the state government can reverse some of the budget cuts made over the last year.
Gov. Bullock said that after the end of the fiscal year on June 30th, state officials determined they will be able to restore about $45 million to state agencies.
Last year, when the state was projecting a $227 million budget shortfall, lawmakers approved about $76 million in cuts, along with fund transfers and other adjustments, during a special legislative session.
They also included a provision that would restore some of that funding if state revenues came in higher than projected.
Gov. Bullock said the state will determine all the areas where the cuts will be back-filled by Sept. 1st. He expects most of the restorations to be in the Montana Department of Public Health and Human Services, which sustained by far the largest cuts.
“All I can do is the best that I can with the dollars that we can get,” he said. “I think that this affords an opportunity going forward to mitigate some of the problems that we’ve had.”
The governor said he has already decided to reverse a cut in Medicaid payment rates for health care providers. The 2.99% cut in payments affected thousands of providers that offer services to low-income Montanans and those with disabilities.
The Montana Health Care Association, which represents long-term care facilities, filed suit over the rate cuts, which took effect in January. They argued the state didn’t follow proper procedure when making the reductions, saying DPHHS didn’t explain the reasoning for the cuts or give providers enough chances to participate in the process.
Rose Hughes, the association’s executive director, called Gov. Bullock’s announcement Wednesday a step in the right direction. “We’re pleased that they recognized the importance of Medicaid providers,” she said.
But Hughes said she expects the lawsuit to continue for now. She said, even if the cuts are fully restored, MHCA is still concerned about the months when the rate was reduced and about what they see as the government’s violations of state law.
Gov. Bullock said budget director Dan Villa and DPHHS director Sheila Hogan will hold a listening session with providers Wednesday, Aug. 1, to discuss budget priorities. The meeting will begin at 10:30 a.m. at the Great Northern in Helena.
Gov. Bullock also announced Wednesday that the state had reached an agreement with CoreCivic, a Tennessee-based company that operates the Crossroads Correctional Center outside Shelby, Montana’s only private prison.
Under the agreement, the state will extend the company’s contract to run the prison for two years, at the same daily rate per prisoner they are currently receiving. CoreCivic will return about $34 million in use fees the state has paid over the years, set aside as a potential payment in case the government decided to buy the prison.
“CoreCivic is proud to be able to assist the State of Montana during its current budget challenges,” CoreCivic public affairs director Amanda Gilchrist said in a statement. “We have reached a verbal agreement that is consistent with our prior offers.”
Gov. Bullock said, as part of the agreement, CoreCivic would allow the state to provide human rights training for employees and inmates at the Shelby facility, and would pay for three full-time employees or equivalents, assigned at the state’s discretion, to focus on substance use treatment and vocational education.
Ahead of the special session, CoreCivic had offered to return the use fee in exchange for a ten-year contract extension at CCC and an increase in their daily rate. Bullock resisted that proposal, saying he did not believe the rate should be increased when the state was making other budget cuts, and that he did not want to commit his successors to a long-term contract.
Gov. Bullock said Wednesday he does not believe privately operated prisons are the best option for the state over the long term. But he admitted the majority of state legislators have no interest in purchasing the Crossroads facility, so the only way the state could access the $34 million would be to reach an agreement with CoreCivic.