HELENA – Fiscal analysts reported that the state’s budget picture is getting worse, saying projections could drop by at least $50 million.
And Lawmakers, preparing to convene next month to draft a budget, are being told that the revenue projection picture could get even worse.
“I do not believe we have hit bottom yet, and there is more to come,” said House Speaker-elect Bob Bergren.
The Legislative Fiscal Division reported that new national projections are affecting Montana, in particular a declining price of oil that hurts a key source of state tax collections.
The new figures mean that overall tax collections for the upcoming two years will be significantly less than the current two-year budget cycle. The analysts noted that makes it more difficult to draft a sustainable budget.
Clayton Schenck, legislative fiscal analyst, said the analysis is difficult to make because national economic projects continue to fluctuate. He said a full report, expected after Christmas, is likely to find that the drop in revenue is greater than $50 million
“We’re just finding that is so volatile, nobody can get an accurate picture of what it is going to happen next,” Schenck said.
Gov. Brian Schweitzer warned in his budget released last month that things will be tight, and wants lawmakers to set aside large reserves. On Tuesday he welcomed a judge’s decision finding the state would not be forced, amid tough times, to spend more money on education.
“Montana is not immune to the challenging economic times across the nation and like most families the state will have to watch its money carefully,” Schweitzer said.
Schweitzer has said he will oppose any tax increases. Bergren echoed those sentiments.
“I think we will just have to tighten belts, that’s what I support,” Bergren said. “I think we’ll just have to live within our means.”
Previously, the projected surplus for the upcoming budget period, which ends in mid-2011, was set at about $287 million. That alone had dropped almost $500 million since the recession first began eroding rosy projections.
The latest estimates mean the projected surplus will now be closer to $200 million, although Schenck said the exact figure won’t be available until the full report is prepared later this month.