Editor's note: This is the second of a continuing, periodic series of stories examining Gov. Brian Schweitzer's record during his first term, as he seeks re-election for a second term. Each story will focus on a specific issue.

Throughout his campaign, Republican gubernatorial candidate Roy Brown has repeatedly hammered Gov. Brian Schweitzer on one issue — what he calls the “startling growth” of state spending under the Democratic governor.

“The people of Montana do not want to sit back and let the governor continue with four more years of reckless spending,” the Billings senator told the Montana Republican Party convention in June.

“Can your business survive with that kind of increase in spending?” Brown asks on his Web site. “This growth of government is a recipe for disaster.”

Schweitzer returned fire against Brown, saying: “He says we should spend less, but for the last seven months he has not been able to come up with a single place he would cut — not one, not one program, not one dollar.”

Brown questioned the administration’s proposal, approved by the Legislature last year, to spend nearly $200 million on new state buildings. Brown said it makes more sense for the state to lease space from private companies that pay taxes. He also voiced concern over large hikes in the budgets for the state Revenue and Corrections departments.

The Republican candidate contended that state general fund spending has jumped by 41.5 percent over Schweitzer’s four years in office.

Is his criticism accurate?

It is technically correct that state general fund spending has risen by 41.5 percent, about $1.1 billion, over four years, according to the nonpartisan Legislative Fiscal Division.

That amounts to a general fund increase of 10 percent a year under Schweitzer. The average state general fund growth rate is about 5 percent annually, said Legislative Fiscal Analyst Clayton Schenck.

But included in the $1.1 billion spending increase is Schweitzer’s $100 million 2007 plan that give back $400 apiece to Montana households in property-tax rebates.

It also includes $26 million to freeze university system tuition for Montana students for two years.

Schweitzer and some others would argue that returning money to taxpayers shouldn’t count as spending.

“Only someone involved in a big bureaucracy or a politician would consider giving the people money back as spending,” Schweitzer said. “I certainly don’t.”

Schenck said the tax rebate is categorized as a tax expenditure and properly counted as spending because “the facts are, the government has less money.”

If Schweitzer’s $100 million in tax rebates is not included in the tally, state spending still rose by 37.7 percent over the past four years under the LFD figures.

However, Schweitzer’s budget office came up with its own calculations and concluded state general fund spending increased by 34.1 percent over four years, or by $995 million.

Schweitzer said the growth amounts to about 7 percent a year, compounded, which he said is in line with the spending of other recent governors.

While defending his own office’s calculations, Schenck said Schweitzer’s own budget calculations “don’t seem unreasonable.”

But Brown attacked Schweitzer’s own budget growth calculations as “phony.”

“He’s trying to manipulate the numbers to take out anything he doesn’t like,” Brown says. “The Legislative Fiscal Division is a nonprofit division that calculates these numbers. They’re not trying to fiddle with them. They’ve come up with a number — it’s a 41.5 percent increase. It’s the biggest spending increase in Montana history, and there’s no other way to get around it.”

Spending has gone up for a variety of reasons the past four years, Schweitzer said, including a couple of financial problems he inherited upon taking office as governor in January 2005 after 16 years of Republican governors.

In 2004, the state Supreme Court declared Montana’s school funding to be constitutionally inadequate. Studies by experts found that pension funds for retired state employee and public employees faced potential deficits topping $1 billion. Under Schweitzer and the Legislature, Montana has pumped hundreds of millions of dollars into trying to fix these problems.

Because of the state’s booming economy, the state’s projected general fund surplus hit a record, topping $1 billion, when the Legislature convened in January 2007.

Schweitzer recommended spending the one-time-only money for one-time-only purposes so the spending was not built into future budgets.

In a reversal of past state policy, Schweitzer said he proposed and the Legislature agreed to use one-time money to pay some $200 million in “cash on the barrelhead” for new or renovated state buildings, instead of bonding and paying more, with interest, over several decades.

This was not counted in the general fund.

Because the state’s economy has improved, Montana had to pay $70 million more in matching funds for Medicaid and other human service programs because the federal share has dropped.

Schweitzer said all three national bond-rating agencies — Fitch, Moody’s Investors Service and Standard & Poor’s — cited the state’s current fiscal management in upgrading the state’s ratings for the first time in 26 years. That allows the state to borrow money at lower interest rates.

In 2005, Brown denounced a state budget that included a 23 percent general fund increase over two years. He voted against it every time, but cast the deciding vote for it late in the session to move it out of the House, which was split with 50 Republicans and 50 Democrats.

“I was the only Republican,” Brown said. “I only voted for it to stop the stalemate. I didn’t agree with it in any way, shape or form. But it wasn’t going anywhere.”

In 2007, Brown opposed the state budget. However, Schweitzer said he vetoed a number of miscellaneous spending bills, and Brown voted to override vetoes that cut state spending by $30 million. Schweitzer prevailed as legislative efforts to override the vetoes failed.

To save money, Brown advocated leasing state buildings instead of paying millions to build new ones.

“I just don’t see the economics in the state owning buildings when you could lease a building from a private company that pays taxes and property taxes,” Brown said.

“I guess a guy who leases buildings likes to lease buildings,” Schweitzer said, referring to Brown’s business, which owns apartments that rented out. “My management style with money is way different. He borrows today to build. Mine is, if it’s so important, pay today.”

Brown criticized large budget increases in the Revenue Department “just to make sure everybody’s paying their taxes.”

Schweitzer said the Revenue Department has fewer employees today than it did under Republican Gov. Marc Racicot in the 1990s. The new money appropriated for tax audits and enforcement in 2007 already has yielded an $18 return on each $1 spent, Revenue Director Dan Bucks said.

Brown also said he would “take a very close look at cutting that huge increase” in the Corrections Department.

Schweitzer expressed surprise. He said Montana won praise from a national research foundation for lowering its prison population at one of the fastest rates nationally. That’s a reverse of what was occurring when he took office, he said.

“Now we’re treating the mentally ill, we’re treating the alcoholics, we’re treating the meth addicts,” Schweitzer said. “And it costs a heck of a lot less money to put somebody out on a prerelease program and make them adhere to strict standards of urine analysis and counseling than it does to put them in the Big House and feed ’em three squares a day and have to maintain a bunch of bricks and barbed wire.”

Finally, Brown has said, if elected, he will propose creating a commission of a dozen or so private auditors, accountants and legislators to scrutinize the state budget for waste and duplication. They would determine which programs work and which don’t to create a more efficient state government.

Schweitzer said he proposed a very similar idea in 2005, but all 50 Republicans, including Brown, opposed it.

Brown said he opposed the bill because it called for Schweitzer’s lieutenant governor, John Bohlinger, a former Republican legislator, to head the anti-waste council.

“Bohlinger said publicly that he has never found any waste in government,” Brown said, adding that he’d seen it in a news story.

However, neither Brown’s campaign nor the IR State Bureau was able to find such a clipping.

In 2003, Bohlinger, then a Billings senator, wrote an op-ed column for Billings Gazette discussing the state’s $230 million budget shortfall at the time. “There may be some waste or duplication of services in a general fund budget of $2.5 billion, and this must be eliminated,” Bohlinger said. “I believe the Legislature is addressing this problem through close scrutiny of all department budgets to eliminate waste. I can assure you this elimination will not total $230 million.”

If Brown didn’t want Bohlinger to chair the efficiency committee, Schweitzer said he could have amended the bill to put someone else in charge.