Montana showed a general fund surplus, or ending fund balance, of $400 million at the close of the fiscal year June 30, Gov. Brian Schweitzer said Wednesday. That's more than twice the $190 million the Legislature projected last year.
What's more, the early estimates are that surplus also will remain in the $400 million range in mid-2009 - more than three times than what was projected last year.
Schweitzer attributed the surplus increases to a variety of factors. Individual income tax revenues are up $90 million over last year. Oil and gas revenues are $47 million higher, and other natural resource revenues are $8 million higher. He said state agencies squeezed their allotted budgets and turned back $34 million to the treasury. The state won an $8 million court settlement from PPL Montana.
Despite the more optimistic projections, Schweitzer still struck a note of caution because of the cyclical nature of the Montana's resource- and agriculture-based economy.
“My experience in Montana, going all the way back to my grandfather's days, is there's about three bad years for every good year in Montana,” he said, adding that the state has seen three or four good years. “So it never hurts to have a little extra grain in the bin.
“It's the same kind of philosophy,” he added. “There will be some tough years in the future, and I don't know if it's happening sooner or later.
A number of states are facing tough economic times. The National Conference of State Legislatures reported that 20 states faced widening budget gaps in June between declining revenues and rising spending.
By mid-November, Schweitzer must propose a state government budget to the Legislature for the next two years. If Republican challenger Roy Brown unseats Democrat Schweitzer in November, he can modify the budget request.
Brown said that Schweitzer's announcement shows Montanans lost out in the 2007 Legislature.
“Instead of families getting permanent property tax relief, we have the biggest budget in history - so big it couldn't all be spent, and we have a higher ending fund balance in Helena,” said Brown, a senator from Billings. “If most folks around the state were given the choice between real tax cuts and a fatter bank account in Helena, nearly everyone would choose to keep more of their own hard-earned money.”
Schweitzer said it's too early to say if he will propose returning money to taxpayers as he did with his $400-per-household property tax rebate in 2007. When the 2007 Legislature started work, the projected state budget surplus for mid-2009 topped $1 billion.
At the same time, Schweitzer vowed he won't raise taxes if re-elected.
“The last thing Montanans need is a state tax increase,” he said.
State residents already are facing higher costs for gasoline and diesel, health care, utilities and groceries, he said.
“This cushion is good. It says that we will be able to continue to maintain the services of state government, that I'll be able to continue to not raise taxes and that Montana has money in the bank,” he said. “So this is good news.”
Schweitzer said it's fortunate that Montana's economy is diverse and “continues to tick along.”
Meanwhile, Brown had a mixed view of the news.
“Montanans should view this news as a mixed blessing, because this means more of their paycheck is needlessly sitting in Helena as families around the state are struggling to fill their gas tanks and put food on the table,” he said. “The fact that state agencies were unable to spend at least $14 million should tell Montanans just how bloated the last budget was. The budget is growing so fast that state agencies couldn't keep up and spend it all, and that's not something to be proud of.”
Charles Johnson is chief of the Missoulian State Bureau in Helena. He can be reached at (800) 525-4920 or chuck.johnson@lee.net.
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Keith wrote on Oct 15, 2008 8:07 PM: