League going to bat for entitlement money

HEIDI DESCH / Hungry Horse News

Cities around Montana could be facing tighter budgets if the state tries to pass some of its deficit onto the cities.

That was the message relayed by Alec Hansen, executive director of the Montana League of Cities and Towns, during a meeting last week in Columbia Falls. Representatives from several area cities attended the meeting.

The Montana League is a non-profit association of 129 municipalities in the state that works for the improvement of local governments.

"We don't know what will happen," Hansen said. "The prospects don't look good."

The state is expecting a $400 million deficit over the next two years. The 2011 Legislature will focus on how to deal with that deficit.

One of the major ways the cities receive funding from the state is through the Entitlement Program. Under the measure, cities and counties agreed to relinquish claim to gambling, motor vehicle, financial institutions and wine, beer and liquor taxes in return for guaranteed payments from the state. The payments are adjusted every year.

Because the money paid is based on a four-year period, strong economic performance during the earlier years is expected to increase the entitlement payments to municipal governments by 5.14 percent.

Hansen said he expects the state to challenge this because of its deficit, but the League plans to argue that the original agreement should stand.

"When times are good more money goes back to the local level. When times are bad less money goes to the local level," he said. "One of the biggest advantages we have is when the state had a surplus nobody asked for more. We stood by our end of the bargain."

"The state has made more money on the Entitlement Program than anybody every thought," he added. "If it wasn't for this the deficit would be bigger."

Hansen said he expects to work with members of the 2011 Legislature to remind them of the intent of the original bill. Many of those involved when it passed in 2001 have been term limited out.

Columbia Falls Finance Director Susan Nicosia helped work on that original bill.

"We have to remind them that it was our money to begin with," she said.

Columbia Falls received just under $569,000 in fiscal year 2010 under the entitlement program. It's expected to receive about $599,000 for fiscal year 2011.

The city has yet to adopt its fiscal year 2010-2011 budget, but is expecting another tight year.

ON THE TOPIC of medical marijuana, Hansen said he expects the legislature will work to correct issues that have arisen since an initiative passed in 2004 legalized use.

"I expect 30 bills dealing with it right away," he said. "The first one will be a right out ban all the way up to leaving it alone."

He predicted that the Legislature will focus on dealing with medical marijuana dispensaries through local zoning and business licenses.

"A lot of cities enacted moratoriums on medical marijuana," he said. "We'll have to see what the Legislature does with it."