Legislators agree state cuts to DPHHS would devastate health services; disagree on budget fix

By Martin Kidston | Missoula Current

Two western Montana legislators and a panel of hospital executives on Friday took a deep dive into the state’s budget crisis and its potential impacts on critical access care, with both policymakers agreeing that cuts to the Department of Health and Human Services are not feasible.

However, Sen. Diane Sands, D-Missoula, and Rep. Ron Ehli, R-Hamilton, did not see eye to eye on ways to cover the state’s budget shortfall, which may require raising additional revenue as the Montana economy continues to evolve.

If revenue is not found, cuts to health and human services could run as deep as $100 million. Providers believe that would reduce rural care, place critical access hospitals at risk of closing, and cost hundreds of workers their jobs.

“I’m one who’s going to stand up front and say that’s not going to happen – it just can’t happen,” Ehli said at the Critical Access Hospital Summit at Providence St. Patrick Hospital in Missoula. “Part of that is critical access hospitals. You cannot take and make those kind of cuts at this level from critical access hospitals and the most needy in the state of Montana.”

Ehli, who said a special session of the Legislature was in order, said he’s waiting on Montana Gov. Steve Bullock to set the parameters of the session, including areas where he believes the cuts should be made and where he looks to raise additional money.

Members of the GOP have opposed revenue enhancements, otherwise known as tax increases.

“There’s a real line in the sand on whether or not we’re going to start looking at revenue enhancements, revenue increases or taxes on Montanans,” Ehli said. “That hasn’t been decided yet. I know what the governor is proposing and I know what the governor is proposing for cuts. Those discussions have yet to be had.”

Earlier this week, Lt. Gov. Mike Cooney said Bullock was looking for a “willing partner” within the GOP to help move the process along and right the state budget. Ehli gave no indication on whether he was willing to take that lead on behalf of his party, though he acknowledged that a special session was in order.

“We need to come together and fix this thing for the state of Montana,” he said. “Temporary cuts to critical access hospitals – I don’t think that’s possible. I think we need to take a good, hard look at what the state budget looks like, the expansiveness of state government over the last four sessions, and we need to look at fund transfers and delayed payments on some of these overbudgeted accounts.”

Sands, who has served in the Legislature since 1997, said the state doesn’t have the money to plug the budget, which could be as much as $227 million in the red by 2019. That will force policymakers to either carry out hurtful cuts to state programs and state residents or find ways to raise additional revenue.

“While it’s not on the table today, we need to look at issues with our revenue structure and changes to our tax structure that’s (still) based on a natural resources extraction model that doesn’t really take into account how our economy works now,” said Sands. “We have to figure out how to permanently provide stability in our revenue system in order to ensure stability in the delivery programs we have out there.”

Even if a special session is called and revenue enhancements are found, Sands said, they won’t be enough to cover the entire deficit. Cuts will be made regardless, though most are hoping they aren’t as deep as 10 percent, and that health and human services doesn’t take an additional $100 million hit.

“I do think there’s going to be cuts to health and human services – hopefully not $100 million – but there will be serious pain in the cuts,” she said. “And as painful as it is that revenue has to be raised, we cannot let the system go into crisis. I grew up in eastern Montana and I know how important those critical hospitals are out there.”

Ron Gleason, the CEO of the Mineral Community Hospital in Superior, urged state policymakers to take seriously the threat that program cuts will have on rural hospitals. While the state is looking to make cuts, hospitals like his have been doing so for years.

“The state is not the only place that’s cutting to try and save costs,” Gleason said. “In 2014, our facility had 75 full-time employees. We now have 60. We have been trying to survive as a hospital by taking some of those cuts.”

Sheila Hogan, the director of DPHHS, confirmed Gleason’s concerns, saying the cuts could impact nearly every level of service down to the diaper allowance provided to foster-care parents. The cuts could also cost hundreds of state workers their jobs, she said.

And that could further reduce the revenue earned by the state.

“I’ve spent the past two days talking to 100 employees,” Hogan said. “Right or wrong, those are single parents, and those people depend on those jobs. That’s going to be very impact to the economy. There’s just a huge ripple effect. We have to look a little bit differently at the revenue that supports state services.”