Montana Budget Better Than Expected, by About $210 Million

By Beacon Staff

HELENA – Montana state government finances are doing better than projected — about $210 million better.

Many states around the country are reporting fiscal trouble and show surpluses turning to deficits. Not in Montana, though.

Gov. Brian Schweitzer said Wednesday that state agencies are spending a little less money than expected and state revenues are higher than expected.

“We are in a better place than we thought we would be,” Schweitzer said. “This is good news.”

The state is closing the books on its budget year that wrapped up June 30. Schweitzer said final numbers will be available Friday, but he says tentative figures show the state has about $400 million in the bank. Lawmakers originally projected the state would have a $190 million cushion.

Schweitzer says wages in the state grew faster than anticipated, which resulted in more tax collections. There is also more oil and gas activity, which produces its own tax revenue.

Schweitzer said about $34 million of the extra money comes from state agencies spending less than expected, most of it in corrections and welfare programs. Schweitzer said he told state agencies to save money if possible, rather than spending their allocation in an attempt to make sure lawmakers don’t take it away.

Schweitzer said he is not earmarking the money for any initiatives, and doesn’t know yet if he will propose another tax rebate. He said economic trouble around the country leaves him worried that it may catch up with Montana.

“It never hurts to have a little grain in the bin,” Schweitzer said. “When you have a good year, you put some aside.”

The National Conference of State Legislatures released a report Wednesday that shows finances are getting worse in many states.

Last year, most states reported stable fiscal conditions, the groups said. Now budget gaps are widening in most states as spending increases and revenue declines.

The NCSL said the few exceptions are states that have a big portion of their revenues tied to natural resources, like Montana.

The governor said, however, that times are not necessarily good for Montanans. He said high gas prices, increasing health care costs and general inflation are taking a toll on family budgets.

“Times are good, but expenses are going up,” he said.

Schweitzer said he would try to avoid tax increases if the economy turns south and state finances crumble in the coming year.

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