Montana's Budget: What the Backbone of State Policy Looks Like and How It Works

A draft of Montana’s state budget for the next two years continues to push through the Legislature, now heading to its last major round of debate on the Senate floor this week. The current version sits at around $16.6 billion in spending, with a large portion going toward healthcare and education.

Now, with about 15 days left in the session, lawmakers, organizations and Montana citizens are scrambling to make sure all of their bases are covered for the next two years, all with the backdrop of a chaotic federal funding picture and questions about how that could affect the state’s spending and the state’s constitutional mandate for a balanced budget.

Public education currently takes up 21% of the budget draft. The natural resources section and the transportation portion together come in at a close third at 18%.

More than $7 billion, or roughly 44% of the budget, is slated for health and human services. A majority of that funding will be heading to Medicaid-funded primary care, the Healthy Montana Kids program and Medicaid expansion, all of which run on federal funds.

FEDERAL WORRIES: Nearly half of the state budget comes from federal funds, to the tune of about $7.3 billion. But with that comes anxiety. Rep. Mary Caferro, D-Helena, said considering how volatile federal funding has been in recent months, she worries about the stability of funding across the board, but especially when it comes to health and human services. She said the one thing legislators can do is spend money as wisely as possible.

“There is great concern,” Caferro said. “Concern with policy makers, concern from state employees about their jobs, but more importantly, about the services that they administer.”

Caferro said her main worries are the loss of jobs, healthcare programs like at-home care and cuts to affordable energy programs — all important to Montana’s elderly community.

Caferro is carrying a bill that would establish a Medicaid stabilization fund — an attempt to maintain Medicaid coverage despite federal volatility.

“The state oftentimes has reverted Medicaid money that they don’t use. I thought, let’s capture that because it’s intended for Medicaid. Put it in this fund and save it for when we really need it,” Caferro said. She said any interest made from the fund would be rolled right back into the program.

Montana’s federal money comes in several forms: one is federal match programs for the state’s general fund, money made by the state for the state, and another comes through grants and program funding, like the $50 million awarded in July of 2024 to support forestry and agriculture in reducing carbon emissions.

“Montana is a federal fund-dependent state,” Caferro said. “It’s really not fair.”

WHAT’S THE PROCESS? Every session, the budget starts with a proposal from the governor. That proposal is then taken by legislators in the House Appropriations Committee and turned into HB 2. From its introduction by the committee’s chair, the bill is amended and updated as bills that will produce state income or expenses pass through the chambers.

The first big step for the bill usually comes around April, when the House of Representatives debates and votes on the bill. From there, it heads to the Senate Finance and Claims Committee, where it starts a similar process of amendments, discussion and voting.

The Finance and Claims Committee passed the bill to the Senate floor on Friday, April 11, following a debate similar to those in the House.

Lawmakers and others can attempt to change sections of the bill, like American Academy of Pediatrics’ representative Stacey Anderson.

At the bill’s first Senate committee hearing on April 8, Anderson asked members to restore funding to autism evaluation clinics, which were cut in 2017. The responsibility has since been left up to schools, which Anderson said are unable to provide adequate care.

That change was added to the bill in committee. Outside of committee discussion, lawmakers still have the chance to amend HB 2 when it hits the Senate floor this week. But amendments passing on the floor are somewhat rare — only five out of 29 attempts during the bill’s House debate passed.

The bill passed Senate Finance and Claims April 11 on an 18-9 vote. It’s likely that Senators will propose more amendments as they debate the bill this week. The amended bill will then have to go back to the House in its changed form for another round of debate on what gets spent and what gets saved.

The additional debate will also consider how other bills making their way through the process, including those that reduce revenue, like tax cuts, will shift the overall financial picture for the state over the next two years.

“House Bill 2 is 18% larger than the 25 biennium, and my constituents did not send me here to spend 18% more than we did two years ago,” said Sen. John Fuller, R-Kalispell.

In its journey through the 2025 session, House Bill 2, the main budget bill, has been met with mixed-party votes. The bill passed the House 58-41 with both Democrats and Republicans on either side of the vote.

But once it hit the Senate Finance and Claims Committee, all Democrats on the committee voted for the budget while Republican votes were split: five for and nine against. Four of the yeas came from members of a coalition of nine moderate Republicans that have steered Senate votes for nearly the entire session.