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Montana state budget

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Montana state budget

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Budget calendar:  Biennial
Fiscal year:  2014
Other state budgets
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The state of Montana operates on a biennial budget cycle, with the current one encompassing FY2012 and FY2013.[1] The fiscal year begins on July 1 of each year.

In FY2012, Montana had a total state debt of approximately $9,530,232,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the FY2013 state budget gap.[2] The state debt total was similar to the FY2012 state debt of $9,533,441,000, [3] Montana's total state debt per capita was $9,547.43.[4]

Federal Aid to State Budget

The chart below represents how much of the state’s budget came from the federal government. The number was the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Montana 34.95% (#7) 36.71% (#11) 41.68% (#10) 41.86% (#8)
  • Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.[5][6]

FY2014-15

Governor Bullock's 2014-15 Budget Proposal can be found online. It includes over $110 million in tax cuts and rebates, using the existing $400 million of general fund balance to give a $400 rebate to every Montana primary homeowner. The governor's proposal includes a $300 million ending fund balance on June 30, 2015.[7][8]


FY2012-13 State Budget

See also: Archived Montana state budgets

The FY2012-13 state spending plan could be found online. The budget was not structurally balanced as FY 2013 anticipated ongoing revenues were less than ongoing spending by $25 million.[9][10]

The state ended FY2012 with a surplus of $453 million.[11]

The Legislature's chief revenue forecaster told lawmakers in Dec. 2011 that Montana's budget was projected to had a $426.7 million surplus by mid-2013.[12]

Republican legislative leaders and the governor agreed to a compromise budget plan contained in HB2. The House approved the bill on April 27, 2011, and was it endorsed by the Senate in a critical initial vote. The compromise includes spending less in state tax money than the governor proposed but spending more from the general fund than Republicans initially proposed. It also restores about $100 million in federal money.[13][14]

Find the state budget analysis provided by the Montana legislature here.

Governor's Proposed Budget

On November 15, 2010, Gov. Schweitzer proposed a $3.7 billion general fund state budget for FY2012-13.[15] The budget ends FY2013 with a $125 million ending fund balance, or general fund surplus, as of the end of the two-year budget period in mid-2013.[15]

Highlights of the budget include[15]:

  • increases in school and university funding
  • reducing homeowner property taxes
  • eliminating business equipment taxes for all but the largest companies
  • a 1% pay increase in January 2012 and a 3% increase in January 2013, with the state's contribution to employee health insurance remaining the same, pursuant to a deal reached with unions awaiting ratification by union members.[15]
  • $95 million worth of transfers of money from other funds to beef up the general fund[16]

Schweitzer's estimate of state general fund tax collections in November 2010 for FY2012-13 of $1.747 billion and $1.846 billion, respectively,.[15] In December 2010, Schweitzer said that state tax collections were outpacing earlier estimates and he predicted that there would be an additional $120 million available for the FY2012-13 state budget.[17]

Revenue Forecasts

In September 2010, the legislature's chief revenue forecaster estimated that state spending for mid-2011 to mid-2013 would be $300 million over the projected revenues for that period.[18] Assuming that all current programs were extended at their current levels, the state's projected total expenses for the next two years were $3.94 billion while the mid-range of anticipated revenues was $3.572 billion for the period beginning July 1, 2011, according to estimates from the Legislative Fiscal Division.[19]

It previously forecasted that the state could need an additional $400 million to continue current government services for the FY2012-13 biennium.[20] When the division made the forecast in June 2010, it also presented state lawmakers with a list of ways to balance the budget, including deep cuts, as well as tax and fee proposals. Proposed cuts included early release of prisoners and closing MSU-Northern.[20] Gov. Brian Schweitzer called the Division's assessment "crazy" and said he threw it in the trash after he read the third page.[20] He said that the estimate was wrong and that he did not expect layoffs or raising taxes would be necessary to balance the budget.[20] The governor said that some of the state's $327 million cash reserves could be used to fill the budget gap.[20] The governor also said that strong grain and cattle prices and a large wheat harvest could boost the state's economy, as could interest in oil shale beds.[20][21] In addition, the governor said that he would tap $341 million in cash reserves to balance the budget should it be necessary.[21]

Union Negotations

Eric Feaver, the head of the MEA-MFT union that represents approximately 3,000 state employees, said that he would not agree to a deal with Gov. Schweitzer that included a pay freeze. The union agreed to a pay freeze for the prior biennial budget and said that four years without a pay increase was too much. The Montana Public Employees Association, which represents approximately 3,500 state employees and 1,500 university employees, also plans to seek the same agreement in joint negotiations.[22]

In response to the union's announcement, the governor's office said that everyone, including state employees, must reduce their expectations given the current difficult economic conditions. Budget Director David Ewer did not rule out a potential pay freeze and noted that many state employees in other states had taken pay cuts, furloughs or layoffs.[22]Traditionally, the governor meets with union representatives prior to legislative budget negotiations. If an agreement with the governor was not reached, union negotiations would take place during legislative budget process, a process that union leader Feaver described as "about the worst possible outcome, but it may be what we had to did."[22]

See also: Evaluation of Montana state website

Independent transparency sites

Currently, the Montana Policy Institute had posted a transparency survey to determine what users wish to see in a transparency-focused website. MPI had 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 were spending your money on."[23][24]

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Montana, which measures state transparency as of September 2011 using indicators from a range of organizations. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[25][26]

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[27][28]

U.S. PIRG Following the Money report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites, entitled Following the Money in April 2014, which measured how transparent and accountable state websites are with regard to state government spending.[29] Montana received the grade of B and a numerical score of 86, indicating Montana was an advancing state in terms of transparency regarding state spending.[29]

Budget background

Montana operates on a biennium budget. The biennium includes a 24-month period from July 1st of odd-numbered years to June 30th of odd-numbered years, such as the 2009-11 biennium, which ran from July 1, 2009 to June 30, 2011. According to state law the Governor was required to submit a budget recommendation to the Legislature by November 15 on even numbered years.[30] 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 beginning January of the next fiscal year and additional revenue forecasts.[31][32]

Accounting principles

See also:Montana government accounting principles

The Montana Legislative Auditor conducts financial and compliance, performance, and information system audits of state agencies or their programs, including the university system. Their audit reports were published online. The Legislative Auditor was solely responsible to the Legislative Assembly and was appointed by and operates primarily through the Legislative Audit Committee. The term of office was for two years beginning July 1 of each even numbered year.[33][34]

The Institute for Truth in Accounting (IFTA) rates Montana “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Montana's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[35] Montana's CAFRs were published online by the Department of Administration, State Accounting Division, State Accounting Bureau. Mr. Paul Christofferson was Administrator of the Montana State Accounting Division. The Accounting Bureau was responsible for the preparation of the CAFR and auditing all local government entities.[36][37]

Credit Ratings

Credit Rating Fitch Moody's S&P
Montana[38] AA Aa2 AA[39]

Stimulus

Montana received $1.37 billion in federal stimulus funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[40]

Public Employees

See also: Montana public employee salaries and Montana public pensions

According to 2011 Census data, the state of Montana employed a total of 72,847 people.[41] Of those employees, 48,254 were full-time employees receiving a net pay of $182.6 million per month and 24,593 were part-time employees paid $24.0 million per month.[41]

See also

External links

Additional reading

References

  1. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  2. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  3. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  4. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  5. US Census Federal Aid to State and Local Governments
  6. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  7. Governor Bullock's 2014-15 Budget Proposal Jan. 7, 2012
  8. 2014-2015 Budget Proposal
  9. 2013 Montana Legislature 2013 Biennium Budget Overview
  10. FY2012-2013 Spending Plan
  11. KTVQ.com "Montana closes out fiscal year with $450 million surplus" Aug. 1, 2012
  12. Businessweek "Montana budget looking at $426 million surplus" Dec. 6, 2011
  13. The Helena Independent Record "Montana Senate approves budget bill in first vote" April 27, 2011
  14. House Bill 2
  15. 15.0 15.1 15.2 15.3 15.4 The Missoulian "Schweitzer proposes business, property tax cuts in $3.7B budget" Nov. 16, 2010
  16. Billings Gazette "Schweitzer's budget counts on $95 million in transferred funds" Nov. 16, 2010
  17. The Great Falls Tribune "Schweitzer says state budget picture $120 million rosier" Dec. 15, 2010
  18. The Great Falls Tribune "Short-term state budget news better" Sept. 16, 2010
  19. The Billings Gazette "State budget picture brightens, but deficit still looms, legislative office says" Oct. 6, 2010
  20. 20.0 20.1 20.2 20.3 20.4 20.5 The Billings Gazette "Ag and oil industries may ease budget gap" Sept. 2, 2010
  21. 21.0 21.1 The Billings Gazette "Schweitzer optimistic about state budget despite forecasts" Sept. 27, 2010
  22. 22.0 22.1 22.2 CanadianBusiness.com "Montana state employees draw line in the sand over potential for 2 more years of pay freezes" July 18, 2010
  23. Montana Policy Institute
  24. Schools Open Montana
  25. Institute of Government and Public Affairs
  26. University of Illinois Transparency Profile for Montana
  27. [ University of Illinois 50 State Transparency Comparison
  28. University of Illinois State Transparency Profiles
  29. 29.0 29.1 U.S. Public Interest Research Group "Following the Money 2014 Report," accessed April 15, 2014
  30. National Association of Budget Officers, "Budget Processes in the States," 2008
  31. State of Montana,"TIMETABLE FOR 2011 BIENNIUM EXECUTIVE BUDGET AND 2009 BIENNIUM ACTIONS," January 15,2009
  32. Montana Legislature,"STATE OF MONTANA BUDGET PROCESS," December 7,2007
  33. Legislative Audit Division Web site, retrieved October 30, 2009
  34. audit reports
  35. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  36. Department of Administration, State Accounting Division, State Accounting Bureau Web site, retrieved October 30, 2009
  37. CAFRs
  38. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  39. Pew Stateline Infographic on State Credit Ratings. Accessed September 26, 2013
  40. Recovery, "Stimulus Spending by State"
  41. 41.0 41.1 2011 Montana Public Employment U.S. Census Data