Regents warned state budget likely to be tight

By GAIL SCHONTZLER Chronicle Staff Writer

DILLON -- The governor’s budget chief warned the Montana Board of Regents on Thursday that the next session of the Legislature will likely feel like “a belt-tightening session.”

David Ewer said many Montanans seem to think the state still has a billion-dollar surplus, but the current estimate is that the state will end the current two-year budget cycle next summer with $125 million in its checkbook.

National and international economic trends are in a downturn, so the state can’t expect the dramatic economic growth it has enjoyed the past few years to continue, Ewer said.

And state government has many competing needs.

“Most money in state government does go to educate, medicate and incarcerate,” Ewer said.

While Ewer delivered his sober message, the University System’s budget expert, Mick Robinson, estimated it would take roughly $60 million in state money for the next two years just to cover inflation and pay raises and keep current programs going.

That’s not counting more than $40 million in new spending the regents would like the governor to build into his 2009-2011 budget to improve the University System.

The regents hope to do all that without raising tuition, said Regent Stephen Barrett of Bozeman. It’s too early to say whether that will be possible, but that’s the goal.

Tegan Molloy, MSU student president, said later that keeping college affordable is important to students, but “not at the expense of quality. We’d rather go to a reputable institution.”

Montana State University Provost Dave Dooley said one positive thing is that university leaders are working with the governor’s office early in the year so the University System’s needs can be widely understood and have a better chance of getting into the governor’s budget.

“It’s a much more collaborative process” than in years past, Dooley said.

State Sen. Bob Hawks, D-Bozeman, recommended that legislators also be kept in the loop as budget discussions advance. Legislators ultimately decide the fate of the governor’s budget proposals.

Two years ago Gov. Brian Schweitzer and the regents reached a landmark agreement -- the governor would seek $50 million in new money for the University System, and the regents would freeze tuition for Montana students for two years. That deal passed the 2007 Legislature.

Schweitzer attended the regents meeting Thursday to spell out details of one of his big priorities n to reduce state energy use by 20 percent by 2010, or “20 by ’10.”

He urged student-government leaders to push campus administrators on energy conservation, saying it could save millions of dollars and help solve one of the greatest challenges the country has ever faced.

“Own it. Push it. Change it,” Schweitzer told students.

Ewer said if the University System wants money for long-range building projects, they should be tied to the “20 by ‘10” goal.

Robinson, associate commissioner for administration and fiscal affairs for the University System, said in light of that, administrators would take another look at their building proposals.

The University System has been targeted because it uses 50 percent of all energy used by state government. Barrett pointed out, however, that it actually has 65 percent of the state’s building square footage.

The regents also discussed their wish list of new spending proposals and added $3 million to invest in two-year colleges.

Several proposals important to MSU are still on the regents’ priority list, including asking for a 2 percent pool of money -- $15.9 million over two years -- to boost staff pay in critical areas where campuses are struggling to hire and hang onto employees.

Shannon Taylor, MSU Faculty Senate chair, said he was glad to see the regents keep the 2 percent plan, though given Ewer’s warning, it’s not a sure thing.

“It would be great to get that 2 percent,” Taylor said. But, he added, “I’m not spending it yet.”

On other matters important to MSU, the regents:

* Approved creation of MSU’s Energy Research Institute. “That’s a big step for us,” Dooley said. MSU already has more than 100 scientists and staff spending $15 million a year on energy research, from clean coal to fuel cells. The institute is expected to increase national recognition of that effort and help attract new grants.

* Delayed approval of an agreement to lease the Bobcat football stadium to the nonprofit MSU Foundation. Regents want see more specifics on proposed improvements to turf and skyboxes and their costs. Craig Roloff, MSU vice president for finance, said putting the foundation in charge of the work would allow more flexibility in hiring architects or engineers, speed up the work and allow a tax deduction for contractors who donate their services.

* Approved spending up to $8.1 million to renovate MSU’s Cooley Lab and seeking a state loan to finance part of the work. The renovations will be paid for with a $4 million National Institutes of Health grant to MSU’s microbiology department and research overhead dollars will repay the loan at about $500,000 a year.

* Allowed MSU to award master’s degrees retroactively to architecture students who graduated several years ago with bachelor’s degrees, but did the same work required by today’s five-year master’s degree program.

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