The Montana Legislature will convene in about a month and a half. When it does, it will find itself in a situation foreign to anyone currently in office. With tax collections racing far ahead of expectations, legislators in January will gather around perhaps $1 billion in “surplus” money - that is, projections showing nearly $1 billion more piling up in state coffers beyond current spending levels.
While most legislative sessions have focused on what to include in the state budget, the harder choices facing the 2007 Legislature may be what not to include.
Gov. Brian Schweitzer this past week sketched out his budget priorities. He's often talked about government's need to live within its means, yet he now finds himself presiding over a government with significantly greater means than when he took office two years ago. He's proposing nearly $400 million in new spending while also rebating $100 million worth of property taxes by sending Montana homeowners $400 checks. He's also proposing another $30 million in business equipment tax reductions for small businesses and $20 million to offset a special tax enacted in 2005 to pay for long-delayed clarification of water rights. Fifty million dollars more would be used to stave off college tuition increases.
The governor's proposing a $25 million incentive shared with local schools to offer full-time kindergarten, which is part of a whopping $230 million package of ongoing and one-time school-funding proposals, along with another $100 million added to the troubled teachers retirement system. His budget also includes $56 million in new spending for mental health facilities and programs, $40 million for corrections, $15 million for state parks and public recreation access, and $5 million for an aging services trust fund.
What's perhaps most remarkable about all this new spending the governor proposes is that it's still well below estimated revenues. Schweitzer's aiming for a $100 million “surplus” or ending fund balance at the end of the two-year budget cycle and wants “anything left” after that to be deposited into a Big Sky Savings rainy-day fund. He wants continuing expenditures capped at $1.8 billion. It's impossible to say whether that's an appropriate level until we all get more information about the sustainability of state revenues. It would be a serious mistake to increase ongoing spending for programs and services to levels that we can't afford over the long run.
Legislators undoubtedly will have their own ideas about the budget, and with the Legislature nearly evenly divided among Democrats and Republicans we can expect a good deal of disagreement.
Disagreement and debate are good things. Montanans and their legislators must remember that every expenditure deserves close scrutiny in times of abundance as much as in times of scarcity. Easy come, easy go is a recipe for trouble.
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