HELENA – With the Legislature convening in three months, the Legislative Fiscal Division says Montana state government shows a projected general-fund budget surplus approaching $1 billion.
The division Wednesday estimated a surplus of $778.6 million for the two-year budget period that ends in mid-2011.
However, the division recommends setting aside another $178.5 million for certain reserves. If that amount is added to the projected surplus, the total grows to $957.1 million.
Gov. Schweitzer’s budget director, David Ewer, says the state achieved the surplus by having a strong economy, living within its means, not raising taxes and having good stewardship.
The division suggested that lawmakers consider the state’s ability to withstand a “prolonged economic recession” when deciding on what to do with the surplus, suggesting the value of establishing a permanent “rainy day fund.”
“$957 million is a lot of money,” said David Ewer, state budget director under Gov. Schweitzer. “We got there by having a strong economy, living within our means, not raising taxes and having good stewardship. Very substantial reserves going forward are clearly appropriate and necessary for this next session.”
The Legislative Fiscal Division’s recommended reserves are $126.5 million for a minimum 3 percent ending fund balance left by the Legislature when it adjourns for the next two years; $35.5 million set aside to fight wildfires; and $16.5 million for the governor’s fund for emergencies.
The legislative report said the primary reason for this budget picture is “a strong state economy over the past several years and a significantly stronger than anticipated growth in actual and projected general fund revenue collections (primarily individual, corporate and oil and gas production taxes).”
“Montana is among an elite few states in this ‘surplus’ status going into the economic downturn,” the Legislative Fiscal Division said.