Ewer said a revised Schweitzer budget for fiscal 2010 and 2011 will be issued Monday afternoon.
“The reduction will be quite sizable because of the national outlook that has worsened and worsened considerably since early November when we put the preliminary budget together for Nov. 15,” Ewer said.
State law requires the governor to submit a preliminary budget to the Legislative Fiscal Division by Nov. 15, which Schweitzer did. He has until Dec. 15 to submit an amended budget to the legislative agency.
The budget then goes to the Legislature, where it becomes the subject of a number of subcommittee and committee hearings before the House and then the Senate before they vote on it. The final version approved by both chambers goes to the governor for his signature, veto or any suggested changes.
Ewer said Schweitzer remains insistent that the Legislature maintain a $250 million ending fund balance or reserve balance in the state general fund budget in fiscal 2010 and 2011. He had called for that surplus last month.
Earlier this week, the top Republican legislative leaders, Senate President Bob Story of Park City and House GOP Leader Scott Sales of Bozeman, said they believe it is “crucial to provide a savings account of at least $250 million to help meet our financial obligations” through the next two years if the state's income fails to meet expectations.
In response, Ewer said, “I was relieved to see the Republican leadership agree with Gov. Schweitzer's proposal to keep $250 million in cash reserves.”
Schweitzer's original general fund budget called for spending $3.92 billion in state general fund money and one-time-only funds over the next two years, compared with the $4.02 billion now being spent in the current two-year period that ends in mid-2009. That's a cut of about 2.5 percent, or $100 million, coming mainly from reductions in one-time spending.
However, in the original budget, Schweitzer proposed that ongoing general fund spending would rise by about $337 million, or 9.7 percent, over the next two years. The totals didn't include one-time-only spending.
In his November budget, Schweitzer also called for a general fund spending cap of $1.95 billion for fiscal 2011.
The spending cap in the revised budget “will be considerably lower than that,” Ewer said.
Earlier this week, legislative fiscal analysts said the projected revenue estimates adopted last month by a legislative committee may have to be lowered by at least $50 million, in part because of declining oil prices, the Associated Press reported.
Terry Johnson, the Legislature's chief revenue forecaster, said Thursday that the latest information from Global Insight, the national economic consulting firm used by the state, is now predicting four quarters of negative growth nationally in 2009. Global Insight said it may be until 2010 before “we see any positive data,” he said.
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