HELENA (LEE) -- Republican legislative leaders indicated Tuesday they'll take the unusual step of splitting the session's major spending bill into separate pieces, hoping it gives them better bargaining power for a $450 million tax-cut package.

House Majority Leader Michael Lange, R-Billings, said the GOP wants to use a substantial amount of the state's projected $1 billion surplus the next two years for tax cuts.

The $150 million in tax rebates and cuts proposed by Democratic Gov. Brian Schweitzer "is not even in the same reality where we are, related to tax reductions this session," he said Tuesday.

Achieving a larger tax cut means carving up Schweitzer's proposed state budget to fit the GOP's plans -- and breaking up the major budget bill makes it easier to do that, Lange said.

Republicans are expected to unveil more details about their plans this morning, when House Bill 2, the major budget bill, has a hearing before the House Appropriations Committee.

Democratic leaders, who said Republicans have not discussed with them the shift in plans, were scratching their heads Tuesday over what the change was supposed to accomplish.

Senate President Mike Cooney, D-Helena, said it appears Republicans are ginning up for a political fight before the budgeting process even unfolds, and House Democratic Floor Leader Art Noonan of Butte said it's a recipe for chaos.

"The only reason to promote chaos over sensible budgeting is to hide something -- not if you want people to understand something better," Noonan said.

Noonan also said the Republicans' approach may be unconstitutional, and that he may consider challenging it in court.

Schweitzer said Republicans appear to be creating a budget process similar to the one used by Congress, where "there are so many moving parts that no one can keep track of what they're spending."

As for the $450 million in tax cuts, Schweitzer said it can happen only if Republicans want to hack away at spending for obvious needs, such as more prisoners at the Corrections Department, public school budgets and the University System.

The Republicans' plans on the budget would undo a process that's been in effect since 1977. The Legislature crafts a single bill each session to fund most of state government.

Traditionally numbered as House Bill 2, the measure is hammered together by the House during the first 2-1/2 months of the session and then sent to the Senate.

The Senate inevitably changes HB2, usually adding more spending, and the bill ends up in a joint Senate-House conference committee that crafts a final version that faces a final vote in both the House and Senate.

This Legislature, House Republicans have said they fear that the Democrat-controlled Senate will take HB2 and load it up with spending to reflect the governor's budget, refuse to accept any major changes -- and bank on at least two House Republicans joining the 49 House Democrats to pass it.

Lange said Tuesday that if HB2 is separated into a half-dozen bills, it makes the political work harder for the Democrats.

They would have to round up two House Republicans to support six or more budget bills, rather than one, big bill, he said.

"They won't like it because it will take away their power to do unilaterally what they want to do to House Bill 2," he said of the Senate. "We don't think we should take a back seat to the Senate."

With six or more separate bills containing spending that Democrats want, House Republicans will be in a better position to bargain for their tax-cut package, Lange said.

Cooney said he doesn't see how the change creates more leverage for the House -- nor does he see why the House feels like the Senate is out to torpedo Republican ideas.

"I've always said send over what you can, and we'll take a look at it," he said Tuesday. "We're not drawing any lines in the sand on tax relief."

Senate Democrats already have passed tax-relief bills and education funding bills, while House Republicans are looking to overhaul a budgeting process that's worked for 30 years, he said.

"I'm just saying, 'Send us what you're going to send us,"' Cooney said. "I'm looking for ways to get people together to come up with the best solution for the people of Montana."

Lange said House Republicans just want to make sure the spending and tax cuts they support work out to a balanced state budget for the next two years. Splitting up the budget bill will help achieve that goal -- and perhaps make it stick as the political process unfolds, he said.

Competing packages

HELENA (LEE) -- A big part of the budget battle at the 2007 Legislature is which tax-cut package ends up getting approved.

Here's a look at the basic elements of the competing plans:

Democratic plan

- A one-time, $400 rebate for Montana homeowners.

- An increase in the amount of business equipment that is exempt from property taxes, from $20,000 to $150,000 per business.

- Elimination of fees paid by water-rights holders.

- The total cost of this package is about $150 million over two years.

Republican plan

- Increasing state aid to schools, thus cutting property tax levies statewide by about $270 million over the next two years. About half the relief would go to homeowners; about 45 percent would go to businesses and industrial property owners.

- The package also allows any in-state homeowner to increase his or her break to $400, through tax credits.

- State income-tax credits for individuals, to cover health care costs. The price tag is $50 million to $60 million.

- Cutting the property tax on business equipment by one-third, and exempting from taxation the first $100,000 worth of equipment. The price tag here is $50 million to $60 million.

- A tax credit for renters, ranging from $100 to $200 a year, at a cost to the state treasury of $13 million.

- Elimination of fees paid by water-rights holders.