Federal funding changes through the recent reconciliation bill and actions by President Donald Trump’s administration are set to impact Montana significantly. During an extended meeting in Helena, state legislators reviewed these changes with legislative support divisions and agency staff. Key areas affected include food assistance, healthcare, and potential reductions in state tax revenue due to new rules. The “Federal Budget Impacts to State” report highlights these funding shifts and predicts a substantial $160 million budget deficit.
The report indicates that around 44.5% of Montana’s House Bill 2 budget relies on federal funding. Amy Carlson from Legislative Fiscal noted that the bill’s “triggers” necessitate collaboration between finance and interim committees. “We’ve well established that those triggers have happened in (the federal reconciliation bill),” Carlson stated, emphasizing the ongoing conversation about federal impacts on the state’s finances.
Marcia Howard from Federal Funds Information for States outlined the administration’s priorities: tax cuts, reduced mandatory programs, and a diminished federal presence. She noted a lack of transparency in these shifts, with some grant programs restructured and timelines shortened. Legal concerns over halted grant programs were also raised, potentially affecting fund distribution.
Susie Hedalen, Montana’s superintendent of public instruction, reassured that federal funds constitute just 13.7% of school budgets, mitigating concerns over education cuts. However, funding concerns were raised for the Montana State Library, Arts Council, and Historical Society, which heavily depend on federal support.
Legislators discussed strategies to sustain food assistance amid potential federal shutdowns, including House Bill 924 and possible state loans. Rose Bender from the Montana Budget and Policy Center highlighted an estimated $230 million biennial revenue loss from individual tax changes and the state’s increased financial responsibility for SNAP and Medicaid programs.
SNAP program changes demand more state funds, linking contributions to an “error rate.” Montana’s current rate of 7-8% necessitates agency efforts to reduce it. Additional discussions covered reduced tax revenue from coal, oil leases, and transportation funding, impacting projects like Nine Pipes and East Missoula. Federal cuts also threaten justice system support for domestic and sexual violence victims.
