Montana's projected 2017 budget surplus shrinks to $109 million - KRTV News in Great Falls, Montana

Montana's projected 2017 budget surplus shrinks to $109 million

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Gov. Steve Bullock Gov. Steve Bullock

The state's budget surplus is projected to shrink to $109 million by next year, according to a new legislative report, which says state tax revenues continue to fall short of expectations.

The projected budget surplus for mid-2017 had been about $300 million, after the 2015 Legislature and Gov. Steve Bullock approved the two-year budget.

The latest report from the Legislative Fiscal Division, which will be presented Thursday to a budget oversight panel, says revenue from income, corporate and oil-and-gas taxes are now estimated to be $200 million below projections for the current two-year budget period.

State revenue and the economy have become a flash point in the gubernatorial campaign, as GOP candidate Greg Gianforte says Bullock has mismanaged the economy and increased spending too much, leading to a likely budget crunch next year.

“Under this current governor, we’ve seen the state’s finances go from green to yellow to flashing red,” he told MTN News Wednesday. “We need new leadership in Helena.”

Bullock has been saying that the initial $300 million surplus – projected last year -- is a testament to good fiscal management and a sound economy.

That projected surplus, however, has been shrinking in recent months, as state revenues have lagged behind expectations.

Still, the administration continues to say that Montana’s economy remains strong.

Budget Director Dan Villa told MTN News Wednesday that state revenue, while less than expected, is still increasing, and that a number of recent economic indicators are positive.

For example, China has agreed to begin importing American beef for the first time in more than a decade and OPEC announced it will cut oil production, which should bolster prices, he said.

“Montana wages are continuing to grow, income-tax collections are at all-time highs and Montana’s economy continues to diversify to levels never experienced in our state,” Villa said.

Republican state Rep. Ryan Osmundson, vice-chair of the House Appropriations Committee, said Wednesday he’s frustrated that the Bullock administration doesn’t seem to want to publicly admit that the budget faces potential problems, as revenues lag.

“They don’t want to go off that $300 million talking point,” he said. “There is no admission that we should deal with this. … They’re not communicating with anybody else. We don’t know where they might be cutting right now.”

Legislative analysts had projected in June that the mid-2017 surplus would be down to $153 million. This latest report adjusted that amount down to $109 million, but said it could be a bit higher if unspent, budgeted funds are returned to the state treasury.

Villa said the Legislature’s projection does not take into account steps the administration may take to rein in spending in the coming months. The administration is scheduled to submit its proposed 2018-19 state budget in November.

He also noted that the surplus or "rainy day fund" has done its job, because Montana has avoided a special legislative session to cut budgets, unlike neighboring states, which have seen huge decreases in oil-and-gas revenue.

The Bullock campaign also said Wednesday that if Gianforte had his way, income taxes would be cut for wealthy taxpayers, leaving no surplus at all.

About Mike Dennison

MTN Chief Political Reporter Mike Dennison joined MTN News in August 2015 after a 23-year career as a newspaper reporter covering Montana politics and state government. While some may believe that politics are boring, Mike firmly believes that's not the case if you tell the story with pizzazz and let people know why the story is important.
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