Mont. gov signs pension fixes, school funding bill

HELENA, Mont. (AP) -- Montana Gov. Steve Bullock on Monday took action on a slew of the biggest-money bills from this year's Legislature, including approving plans to overhaul the state's pension and school funding systems.

The Democratic governor also made decisions on a handful of Republican tax measures, including rejecting a plan to reduce the state's income taxes.

His moves came on a busy day. Aside from budget measures, he also rejected several proposals that would have affected the state's laws, if not its finances. In total, Bullock vetoed 27 bills and signed 30 on Monday.

The Legislature adjourned last month and the governor is wrapping up his review of its bills.

— PENSION: Bullock signed a pension overhaul that asks both employers and employees to pay more while reducing cost-of-living increases in the annual benefit.

The plan is expected to face legal challenge from unhappy retirees who will argue in court that the changes unconstitutionally break the contractual obligations the state made to employees.

The state's largest employee union, MEA-MFT, said it expects to support the litigation — even though it also still supports the overall fixes.

MEA-MFT President Eric Feaver said the measures ensure that pensions will remain intact after Republican hopes to end the plans were dashed.

Feaver said some employees, though, are displeased with the decrease to the benefit known as the guaranteed annual benefit adjustment that was necessary for legislative approval.

"There is no absolute guarantee that the courts will agree that what the legislature did is unconstitutional," Feaver said. "I think, on balance, I would rather have the pension than the GABA. As I have told people, focus on the whole not the part."

— SCHOOL FUNDING: The governor signed the measure from a bipartisan coalition that sends another $50 million to K-12 schools while also seeking to reduce the burden on local property taxpayers with the help of natural resource money.

—TAXES: Bullock signed a proposed business equipment tax reduction, but rejected Republican plans aimed at simplifying and reducing state income taxes.

He said the GOP income tax plan, which lowered rates and got rid of many credits, would harm many middle-income families that benefit from the credits and disproportionality help higher-income earners.

The governor also nixed a tax credit for contributions to private schools and a proposed tax cut on some mandated pollution control equipment.

— OTHER ACTION: Bullock signed a pay increase for state employees, giving many their first raise in years.

Bullock also signed a measure launching construction and other projects in the state, mostly at colleges. One of the largest projects, the construction of the $30 million Missoula College on a golf course grounds, faces legal threats from neighbors unhappy with the project.

The governor also rejected legislative plans to continue an interim committee looking at government efficiencies, which Bullock argued has cost too much and produced almost nothing. He also rejected a planned legislative study of Medicaid as an unconstructive partisan-led panel.

Bullock said in his veto messages that the lawmakers failed to leave a projected surplus of $300 million as he had requested. The total of legislative action, prior to the vetoes, would have left less than $200 million in the bank.

He wrote in rejecting one of the measures, "The Legislature's actions to date leave Montana with an insufficient ending fund balance and spend significantly more than current revenues allow."