Montana state budget (2011-2013)

Note: This article was last updated in 2013. Click here for more recent information on state budgets and finances.

The state spending plan for fiscal years 2012-2013 can be accessed online. The budget was not structurally balanced, as fiscal year 2013 anticipated ongoing revenues were less than ongoing spending by $25 million.

The state ended fiscal year 2012 with a surplus of $453 million.

The legislature's chief revenue forecaster told lawmakers in December 2011 that Montana's budget was projected to have a $426.7 million surplus by mid-2013.

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

The state budget analysis provided by the state legislature can be accessed here.

Governor's proposed budget

On November 15, 2010, Gov. Schweitzer proposed a $3.7 billion general fund state budget for fiscal years 2012 and 2013. The budget ended fiscal year 2013 with a $125 million ending fund balance, or general fund surplus, as of the end of the two-year budget period in mid-2013.

Highlights of the budget included:

• Increases in school and university funding
• Reducing homeowner property taxes
• Eliminating business equipment taxes for all but the largest companies
• A 1 percent pay increase in January 2012 and a 3 percent 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.
• $95 million worth of transfers of money from other funds to beef up the general fund

Schweitzer estimated state general fund tax collections in November 2010 for fiscal years 2012 and 2013 at $1.747 billion and $1.846 billion, respectively. 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 biennial state budget.

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. Assuming that all then-current programs were extended at their then-current levels, the state's projected total expenses for the biennium 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.

It previously forecasted that the state could need an additional $400 million to continue current government services for the biennium. 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. Gov. Brian Schweitzer called the Division's assessment "crazy" and said he threw it in the trash after he read the third page. He said that the estimate was wrong and that he did not expect layoffs or raising taxes would be necessary to balance the budget. The governor said that some of the state's $327 million cash reserves could be used to fill the budget gap. 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. In addition, the governor said that he would tap $341 million in cash reserves to balance the budget should it be necessary.

Union negotiations

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 planned to seek the same agreement in joint negotiations.

In response to the union's announcement, the governor's office said that everyone, including state employees, must reduce their expectations given the 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. 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 have to do."