Montana state budget (2008-2009)
- 1 Impacts of budget woes
- 2 Budget background
- 3 The state of the economy
- 4 Proposed actions
- 5 Budget transparency
- 6 See also
- 7 External links
- 8 Additional reading
- 9 References
Unlike most states, Montana did not confront a budget deficit in 2009. Despite declining revenue projections, lawmakers were working with a budget with approximately $250 million in reserves. Gov. Brian Schweitzer and state legislators planned to use federal stimulus funds for existing state-federal programs for health care, roads and education. Additionally, the governor had suggested a proposal to spend about $40 million of that to maintain the teacher's pension system. “Montana’s economy is holding up pretty well, but nationally we know that these are difficult times,” said Governor Brian Schweitzer. “We have $250 million in the bank and we want to keep it there just in case the worst happens.”
Impacts of budget woes
- See also: State budget crisis, 2009-2010
- The governor had called for a tuition freeze for the state's university system. He argued that during the tough economic times the university system should cut back like state government and private businesses; however, the University of Montana president said that one-time federal money simply wouldn't sustain a tuition freeze.
- The FY 2010-2011 budget included a 3 percent increase in state funding for schools in each of the next two years.
- According to the state Labor Department, Montana's January 2009 unemployment rate increased to 5.6 percent, compared to December 2008's rate of 5 percent. Seasonally-adjusted private payroll employment decreased by 2,000 jobs from December to January. The total number of Montanans who were working, including agricultural and self-employed workers, decreased by 6,038 jobs.
- On January 15, 2009 Gov. Schweitzer announced pay freezes for state employees. All full-time employees making at or below $45,000 a year would receive a one-time lump-sum payment of $450 in July 2009. Part-time employees working over 20 hours and making under $21.63 per hour would receive a one-time payment of $225. There would be no other pay increase in base pay for the next two years. Additionally, the governor and Lt. Gov. John Bohlinger announced that they would not be accepting their own salary increases. The governor was scheduled to receive a 4.3 percent increase, or $4,281; the lieutenant governor a 5.6 percent increase, or $4,386, and the Secretary of State a 4.2 percent increase, or $3,290.
- See also: Montana state budget
Montana operates on a biennium budget. The biennium includes a 24-month period from July 1 of odd-numbered years to June 30 of odd-numbered years, such as the 2007-2009 biennium, which ran from July 1, 2007 to June 30, 2009. According to state law, the governor is required to submit a budget recommendation to the legislature. The state constitution gives sole authority to the legislature to appropriate state funds. The House and the Senate review the recommended budget, along with any requests made and additional revenue forecasts, beginning January of the next fiscal year.
The following table provides a history of Montana's expenditures and gross domestic product (GDP).
|Fiscal year||Expenditures (billions)||GDP (billions)|
- NOTE: The figures for FY 2009 had not been finalized at the time this data was compiled.
The state of the economy
- Montana revenue estimates fell another $41 million in March 2009, the third drop since January, leaving the state $156 million below the figures on which Gov. Schweitzer based his budget.
- Montana was one of 16 states that were seeing a decline in home foreclosures, according to RealtyTrac's latest data in March 2009. Montana had a total of 141 foreclosure filings from December 2008 to January 2009. In total, RealtyTrac estimated that there had been a 67 percent decline in foreclosures as compared to January 2008.
Governor Brian Schweitzer
In December the governor further decreased his fiscal year 2010-2011 state budget, a 2.5 percent decrease from the previous biennium budget, by reducing general fund spending by $52 million. In total, state spending was reduced by $193 million over the biennium. Despite the $250 million in reserves Gov. Schweitzer said that he did not plan to factor the funds into the budget in case "the worst happens." He had also proposed a ceiling on spending of not more than $1.95 billion in general fund dollars for FY 2011. Specifically, the governor proposed $20 million a year for children’s health insurance, an additional $88 million for K-12 and an additional $35 million to support Montana’s higher education system over the biennium. Additionally Gov. Schweitzer estimated $25 million in one-time money for retrofitting state and university buildings to reduce state government energy consumption by 20 percent by 2010.
The budget bill, endorsed in the House by a 64-35 margin on March 16, 2009, would increase spending from the state's general fund about 2 percent for each of the next two years and did not include the use of federal stimulus funds. The measure spent a total of $8.1 billion over the next two years, with $3.3 billion in state tax money. Spending went up $141 million over the last two-year budget period. According to reports, the plan was $65 million less than Gov. Schweitzer's budget proposal.
A resolution to let Montana lawmakers set their own pace for appropriating federal stimulus dollars had some Republicans questioning the need for the funds in the first place. "We're picking up the tab and encumbering our generation and the generations after that to a much bigger part of the tab than we're going to receive," said Rep. Robert Wagner. Most Republican lawmakers called the stimulus package an irresponsible spending spree that they believed would leave future generations with debt. It was estimated that 55 percent of the money would be allocated towards infrastructure, K through 12 education, the state University system, and state and local projects. The largest portion of the proposed funds went to Medicaid caseloads.
Unlike some state lawmakers, Democrats, the state majority, said that they were not concerned about long-range prospects for the budget. In an effort to ensure that federal stimulus funds did not severely impact the financial status of the state after the money was no longer available, they said the stimulus money would be restricted to one-time funding as much as possible. However, they noted that the stimulus funds were necessary and should be used to get programs through the current rough patch in the economy. “Yes, we have done cuts to increases in the budget, but that’s fine,” said House Speaker Bob Bergren, noting that vital state programs needed to be maintained.
Economic stimulus package
Montana was expected to receive approximately $800 million from the $787 billion economic stimulus package. According to White House officials, the stimulus bill was estimated to create or save 11,000 jobs.
According to preliminary reports, Montana was expected to receive:
- $211 million for highways and bridges
- $79 million for clean water, regional water systems, and local sewer projects
- $53 million would be allocated to Montana for energy and weatherization
- $26 million for the governor’s 20x10 energy conservation initiative
- $51 million for higher education
- $43 million for K-12 school infrastructure
- $12.6 million for job training and workforce development
- $5 million for broadband to connect rural areas
- $43 million to stabilize teacher retirement
- $10 million to preserve the distressed wood products industry
- $60 million for Medicaid
As of 2009, Montana had no statewide, official spending database online. On January 17, 2009, Montana Senator Joe Balyeat of Bozeman introduced SB 241, the "Taxpayer Right to Know Act." This bill would have created a searchable website that, among other things, would have listed information about the state's budget. Data would have come from executive, legislative and judicial agencies, and would have included appropriations, expenditures and revenue sources. According to Senator Balyeat, the taxpayers' "constitutional right to know where their money is going is something that we as the people's elected representatives, the legislature, believe is paramount," and "we believe this bill would do exactly that." Given that the "Taxpayer Right to Know Act" had over half of the legislature signed on as co-sponsors, the bill appeared to have had a high probability of passage. However, SB 241 died in committee. as did HJ 43.
House Joint Resolution 43 would have mandated that Montana's Legislative Finance Committee evaluate what would be necessary to put a state spending site online. Both bills died in committee during the spring of 2009.
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
|State database||Searchability||Grants||Contracts||Line item expenditures||Dept./agency budgets||Public employee salary|
The Montana Policy Institute posted a transparency survey to determine what users wished to see in a transparency-focused website.
Additionally, the Montana Policy Institute launched a website dedicated to bringing transparency to Montana. MPI also launched a site dedicated to education transparency, a site which "contains district level revenue and spending data in an easy to use format. You'll be able to compare up to five districts to each other and to state averages across several meaningful criteria. You'll be able to see revenue and spending trends for each district. And you'll be able to see just how difficult it was to get publicly available information about what your schools are spending your money on."
Public employee salary information
- See also: Montana state government salary
Economic stimulus transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.
- Montana was expected to receive an estimated $603,398,241.
- Model transparency legislation from the American Legislative Exchange Council was available at this link.
- Montana Policy Institute
- Montana Office of Budget and Program Planning
- Montana Legislature, Legislative Fiscal Division
- Transparency in Montana's Education, Montana Policy Institute
- The Seattle Times,"House supports resolution to request stimulus funds for Montana," March 17,2009
- Associated Press,"Montana revenue estimates fall another $41 million," March 13,2009
- Gov. Schweitzer,"Governor Presents Budget: Stresses Fiscal Soundness and Investing in Kids," November 15, 2008
- Associated Press,"Gov. challenges regents, schools to cut spending," March 21,2009
- Missoulian,"Analysis: Budget spending increases while revenues dwindle," March 15,2009
- KPAX,"MT unemployment up to 5.6%," March 11,2009
- State of Montana,"Governor and Lt. Gov and Secretary of State Freeze Own Pay - Unions Ratify Negotiated Pay Freeze," January 15,2009
- State of Montana,"TIMETABLE FOR 2011 BIENNIUM EXECUTIVE BUDGET AND 2009 BIENNIUM ACTIONS," January 15,2009
- Montana Legislature,"STATE OF MONTANA BUDGET PROCESS," December 7,2007
- US Government Spending,"Montana State and Local spending," accessed March 24,2009
- Smart Money,"Bright spots on the foreclosure front?," March 13,2009
- Governor Schweitzer,"Governor Presents Adjusted Budget: Reduces Biennium Spending by $193 Million," December 15,2008
- State of Montana,"Budget Highlights Fiscal Years 2010-2011," accessed March 24,2009
- Associated Press,"Mont. lawmakers beat back changes to spending plan," March 17,2009
- Montana's News Station,"MT legislature discusses stimulus spending plans," accessed March 24,2009
- Montana Recovery,"Governor Schweitzer releases plan for Montana Reinvestment Act," March 6,2009
- American Recovery and Reinvestment Act,"Estimated job effect," accessed March 23,2009
- Bill Status, Senate Bill 241, "Taxpayer Right to Know Act"
- Bill Status, House Join Resolution 43
- National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- Wall Street Journal,"Stimulus Spending by State," March 12,2009