House approves $16.6 billion state budget
Fixing bridges and roads, while funding nursing homes and law enforcement officers took center stage Wednesday on the House floor with the full chamber's first look at Montana's big budget bill — a plan that costs $16.6 billion.
Last fall, Gov. Greg Gianforte proposed his budget for the next biennium, and since the beginning of the 2025 Montana Legislature, House subcommittees have combed through the request and put their fingerprints on it.
Wednesday, House Appropriations Chairperson Llew Jones, R-Conrad, and the chairpeople of the subcommittees presented the various sections of House Bill 2 on health, justice, education and natural resources and transportation.
Jones said the budget is the result of a lot of time and work by staff and legislators, and the product before his colleagues generally followed growth in inflation and population.
Given the hours of investment legislators had put into HB 2 the last three months, he urged his fellow representatives to stick with the bill as is and avoid any amendments — either to increase or decrease it.
'It has some discipline and is transparent,' Jones said.
But adopting a budget is job No. 1 for the legislature, and Rep. Bill Mercer, R-Billings, advocating for his own amendment, said legislators shouldn't just be rubber stamps.
'You're not a potted plant here. You have to exercise your own judgement as to whether this makes sense,' Mercer said.
The largest chunk of the bill goes to the Department of Public Health and Human Services, or Section B, an estimated 44%, according to a budget overview from the Legislative Fiscal Division.
That's $7.3 billion for the 2026 and 2027 fiscal years.
Education accounts for $3.5 billion, and transportation and natural resources make up $2.9 billion.
Rep. Mary Caferro, vice chairperson for House Appropriations, said the budget is a statement of legislator values, and she too thanked staff from the Legislative Fiscal Division, 'the smartest people in the whole Capitol.'
'The people of Montana deserve a fair budget that makes life more affordable and provides them the freedom that comes from economic security and good health,' said Caferro, D-Helena.
After a full day of review, the House adopted the budget bill on a 60-39 vote.
'Let's send it onto the Senate and let the work continue,' Jones said.
Montana's population is increasing, and the state is feeling effects of both the population growth and tourism, said Rep. Jerry Schillinger, R-Circle.
'It's affected all of these departments,' said Schillinger, chairperson of Section C.
His committee reviewed Fish, Wildlife and Parks, the Department of Environmental Quality, the Department of Transportation, the Department of Natural Resources and Conservation, and the Department of Livestock.
For example, he said, the state needs to fix bridges, although the number of people needed for the job was debated in an amendment, as was a hunter education course for Montana.
The legislature added 22 people to the Department of Transportation, many to work on bridges, although with money from state and federal fees.
It also added four meat inspectors in the Department of Livestock, one portion of an overall 6.4% increase for the biennium from the 2025 base, or $2.1 million overall.
In an explanation for the meat inspectors, Schillinger said the pandemic brought to light how fragile food systems have become, and those employees will help with safety.
He also said the Department of Environmental Quality has been affected 'in a large way' with housing and commercial developments and legal challenges related to permitting.
As a result, he said, nine more people are budgeted to handle the growing caseload for that agency at a cost of $2.3 million for the biennium.
That amount is part of a 7.2% increase for the biennium altogether, or $9.7 million, including $5.4 million for mine reclamation.
All told, Schillinger said his section added 63 positions for a total of 3,973.
On the floor, Mercer tried to cut an engineer and project manager from the Department of Transportation budget, or two positions altogether out of 16, but the amendment failed.
He said everyone is committed to bridges, but he didn't see the need for the total number of new employees.
'I think that's excessive,' Mercer said.
But Schillinger and others said the legislature discussed it, a number of bridges are under restrictions, and Montana roads need the resources.
Rep. Marilyn Marler, D-Missoula, pitched a successful amendment to reinsert a hunter education program into the budget, which she argued is a healthy and important part of the state's culture and heritage.
Marler also said it wasn't costing taxpayers because the dollars come from hunting licenses and an excise tax on guns and ammunition.
Rep. Shannon Maness, R-Dillon, said it pained him to speak in support of a budget increase, but the money was already allocated for that purpose — and it's needed.
'This program is suffering,' Maness said of hunter education. 'It's been hampered in recent years.'
The public safety portion of the budget, comprising five agencies, is led by Rep. Fiona Nave, R-Columbus, and is the smallest of the budget sections.
'These dollars really, really have to stretch over things that we are required to do,' Nave said.
Nave summarized the budgets for the judicial branch, Department of Justice, Office of Public Defender, Department of Corrections and the Public Service Commission, the latter of which receives no general fund money.
The budget approved in committee gave substantial, 9% raises to highway patrol to address poor retention, which Nave said was one of the biggest issues in state law enforcement.
'The officers end up moving from agency to agency depending upon who can pay them the most. And unfortunately, the state's a little bit disadvantaged because of the timing,' Nave said 'We end up having to do it first and then all the counties can take a look and say, okay, you know, can I match that.'
Another big ask came from the judiciary, where the courts asked for additional judges in Yellowstone County to handle increased caseload. The committee approved two of the requested three judges, but added a condition requesting the 10 judges in the county to look at having specialized dockets to streamline the process.
The Department of Corrections saw the largest increase in the budget with a $68 million bump. The biggest chunk of that is nearly $24 million in contracts for out-of-state prison beds — roughly three times what the state originally paid in 2023 to send 120 inmates to Arizona.
Now, Montana houses 600 male inmates in out-of-state prisons owned by private prison operator CoreCivic, and while the Legislature is considering hundreds of millions of dollars for DOC capital projects, it is unlikely to make much headway in the backlog of inmates in Montana's penal system.
Rep. S.J. Howell, D-Missoula, brought an amendment to strip the funding to send inmates out of state, citing concerns over accountability and oversight at private prison facilities, but the House opposed the change, with Rep. John Fitzpatrick, R-Anaconda, calling the argument 'completely fallacious.'
Nave said that while she was sympathetic to Howell's position, the state was 'in a crisis' and had no other choice but to pay.
'There are no places to put these people. If we're not going to fund this, you can either put bunk beds in places we have now or put them on the streets,' she said. 'The money put here in the line item is to pay for the beds we are already utilizing and that we need to pay for. We are obligated.'
Another amendment to increase funding for the Office of Public Defender — which the committee funded below what the department had asked for — also failed.
But one amendment introduced on the floor did pass. Earlier in the session Speaker Pro Tempore Katie Zolnikov, R-Billings, carried a bill to create a railroad safety inspection program within the PSC as a standalone bill, which passed the chamber 98-2 before being tabled in the Appropriations Committee.
Her budget amendment asked for half the inspection staff the original bill requested, and many lawmakers spoke in support, pointing to recent train derailments in Montana as a need.
Rep. Neil Duram, R-Eureka, said he wanted to avoid another scenario like a 2021 Amtrak derailment that killed 3 people and injured more than 50.
'That's the event that we want to prevent. If $200,000 will get us there, I'm a yes.'
The Department of Public Health and Human Services accounts for nearly half of the entire budget for HB 2, more than $7 billion for the biennium.
Rep. Jane Gillette, R-Three Forks, served as chairperson for that subcommittee, and she said the good news is that the legislature trimmed the budget slightly from the governor's proposal.
However, she also said one difficulty is declining federal match dollars for health programs. Gillette said for every 1% decline in federal match, Montana has to pay from $16 million to $17 million.
'That's going to present some serious future challenges for us,' Gillette said.
Caferro said Gillette ran a fair subcommittee, and such leadership is important because many members of the public from all walks of life testify there.
'We see the faces of the people behind all of these decisions and numbers and lines on pieces of paper,' Caferro said.
To Caferro, the agenda represented a 'strong agenda for children,' for babies, toddlers and families.
'Children don't ask what home to be born into, but I believe it's government's role to take care of children first and foremost,' Caferro said.
The cost for the biennium is 1.6% lower than the base in 2025, according to the overview from the Legislative Fiscal Division.
Highlights include one-time funding of $79.5 million to operate facilities including the Montana State Hospital, nearly $2 billion for Medicaid expansion, provider rate increases for Medicaid and non-Medicaid providers, and a cut of 80 net positions out of 2,832.
The House considered numerous amendments — to cut and add — and all but one, characterized as a technical adjustment, failed.
Mercer, a fiscal conservative, proposed numerous amendments to trim the budget, and his proposals failed, but other legislators joked that they would work on softening his heart.
'My heart is plenty soft,' Mercer joked back.
Rep. Terry Falk, R-Kalispell said much of the work on the general government section of HB 2 was about ensuring 'we have good transparency and accountability in state government.'
The committee reviewed the Legislative branch, Consumer Council, Governor's Office, the Commissioner of Public Practices, the Auditor's Office, the Department of Revenue, the Department of Administration, the Department of Labor and Industry, and the Department of Military Affairs.
Some of that was seen in the Legislative branch, which received information and technology upgrades, including an additional $229,000 in one-time funding to increase the public's access to lobbying information.
The State Auditor's Office also received money for consumer information and fraud prevention. The Department of Military Affairs also saw a boost, with the budget adding $3.8 million to develop 14 new positions.
Rep. Luke Muszkiewicz, D-Helena, said the section was about the people behind the numbers and that state employees are 'knowledgeable, conscientious and dedicated public servants who are committed to serving the people of Montana.'
Falk said there was some pushback at times, but called out the tension between the Legislature and the Executive office, saying 'it should be there.'
Three amendments were brought, with just one passing from Falk. It eliminated $12.9 million from the general fund, state special revenue, federal special revenue, and proprietary funding that was set to go to the Recruitment and Retention Contingency Fund, the largest cut made to the budget on the floor.
'I think in general, things were restrained,' Falk said. 'I would like to have seen us do more.'
Chairman David Bedey, R-Hamilton, highlighted investments the state is making in education. Bedey's subcommittee reviewed the Office of Public Instruction, the Board of Public Education, the Office of the Commissioner of Higher Education, the Montana School for the Deaf and Blind, the Montana Arts Council, the Montana State Library and the Montana Historical Society.
The Office of Public Instruction received a 10% increase in funding for the Local Education Activities Program, which involves aid for major maintenance projects, debt service assistance and school lunch funding. The budget also includes an increase in teacher pay, which is contingent on the passage of House Bill 252, which has come to be known as the STARS Act and is a major education proposal this session.
There's also $640,000 for a study of high schools and $2 million for OPI for database modernization. Several bills — HB 515, HB 551, SB 322 — will have to pass for some appropriations to go through. There's also money for the agency to add seven new staff.
Bedey also added the committee had made some adjustments and cuts 'to align the budget with actual projected spending for the unanticipated significant enrollment appropriation.'
There's also money to study how AI will be used in classrooms, which will be implemented by the Montana Digital Academy.
'Its purpose is to get our arms around how AI is going to influence education and the kind of educational materials that we more and more rely upon, like online materials, to support,' Bedey said. 'We don't use books like they did when I was a kid.'
The Montana State Library will also see some increases, mostly for personal services and fixed costs.
The Montana Historical Society also received an increase — including a one-time appropriation of $1 million to plan for the country's 250th birthday — as well as half a million for operation of the Montana Historical Society.
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