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Montana agency seeks $70 million to standardize facility wages, shift funding to operations
Summary
The Department of Public Health and Human Services and legislative analysts told the Section B subcommittee the budget’s largest proposal — DP 33104 — would raise clinical wages, add one-time funding for contract labor and remove 97.3 vacant positions from the personnel budget to align appropriation with current spending patterns.
Legislative analysts and Health Department officials told the Legislature’s Section B subcommittee that the largest change package in the healthcare facilities request, DP 33104, would redirect how facility staffing and contract labor are funded across seven state-run facilities.
LFD analyst Dr. David Pollet said the package ‘‘adjusts wages for clinical positions, RNs, psych techs, and others’’ and pairs ongoing personal-services funding with large one-time-only (OTO) operating amounts for contracted labor. Pollet pointed committee members to the decision-package materials and suggested the Legislature might ‘‘clarify legislative intent for changes of this type.’’
The nut graph: The package totals roughly $70.3 million total funds for the 2027 biennium, including about $69.9 million in general fund, according to materials and department testimony. It combines wage increases for state clinical staff, large one-time operational funding for contract labor, and a proposed reduction of 97.3 budgeted positions (PB) to match long-term vacancy patterns.
Department financial manager Gene Hermanson walked the committee through the package’s components. He said the request ‘‘contains 4 separate parts’’: (1) funding to standardize current wages at some facilities, (2) further wage increases to bring state clinical staff nearer market levels, (3) one-time operational funding to cover contract labor as vacancies persist, and (4) a reduction in budgeted positions to reflect longstanding vacancies.
Hermanson said the ongoing personal-services portion for higher wages is roughly $4.4 million over the biennium. The operations (contract labor) portion is large and one-time: about $40.0 million in FY 2026 and $39.0 million in FY 2027. The personnel reduction lowers appropriations by about $13.5 million across the biennium and equals 97.3 PB. LFD staff reiterated that much of the division’s near-term spending mix is general fund (about 76% of the division’s request) and that OTO appropriations from the prior biennium remain significant in the current base.
Committee members pressed for detail on how the PB reduction interacts with contract spending. Senator Pope asked whether removed PB simply convert to cash for contract labor; Pollet said the change package ‘‘align[s] their appropriation with the way they think they’re going to spend it,’’ and Hermanson explained the department expects some long-term vacancies will remain and that contract staffing will still be required even as the state hires more permanent staff.
Officials emphasized recruiting and retention activity that has reduced contract nursing costs per patient at the state hospital compared with fiscal 2023 levels but said the needs for ‘‘one-on-one’’ attendants have grown and remain very costly (the department estimated roughly $6 million of added cost this year tied to increased one-on-ones).
The department provided a supplemental fact sheet detailing which facilities contribute to the 97.3 PB reduction and the wage proposals by job class; LFD and the department committed to provide more breakdowns on the current value of PB appropriations in FY 2024–25, overtime baselines, and statutory authorities for state-special revenue sources used in the division’s budget (for example, cigarette and alcohol tax carve-outs that fund veterans homes and MCDC operations).
Ending: The subcommittee did not take action on DP 33104 during the hearing. Staff and the department agreed to provide additional documentation (pay-rate comparisons, overtime totals, and the department’s supplemental packet) to the committee for follow-up review ahead of budget deliberations.
