State Revenue Estimates Fall Another $41 Million

By Beacon Staff

HELENA – State revenue estimates have fallen another $41 million, spiraling further downward just as the House prepares to take up the state’s main budget bill next week.

The drop is the third since January, bringing the total writedown to about $156 million below the figure Gov. Brian Schweitzer based his budget upon.

House Speaker Bob Bergren said on Friday that the revision will not require any immediate action, because unusually large reserves were built into the spending bill to offset such changes.

“I think we can absorb that. We planned ahead, we planned for the worst and hoped for the best,” Bergren, D-Havre, said.

The decrease primarily results from tumbling projections for individual and corporate income tax collections over the next three years. It also reflects new analysis by the Legislative Fiscal Division that finds state revenues may not see a bump from an economic turnaround until past 2011, the last year in the current planning biennium.

Senate leaders said the falling revenue figures would put tremendous pressure on lawmakers to use stimulus money to shore up existing programs, rather than invest in projects for job creation.

“Do you back-fill and hold your status quo or do you invest in your future?” asked Sen. Jim Peterson, the Republican Senate Majority Leader.

Unlike most states, Montana is not looking at a budget deficit, but legislators are working with an austere budget and trying to maintain a $250 million ending balance as a buffer.

Most of the $870 million in stimulus money the state is expected to receive will pour into existing state-federal programs for health care, roads and education. But lawmakers are currently looking at how to allocate roughly $300 million in discretionary funds.

Schweitzer’s proposal to spend about $40 million of that to buoy the teacher’s pension system fizzled Friday, as an appropriations subcommittee divvied that money up among other education priorities.

The panel wants an extra $8 million, for about $18 million total, toward a proposed college tuition freeze. The full Board of Regents, which sets tuition, has yet to agree to the plan.

That panel also wants more for new scholarships, and the rest spread among programs such as special education and general help for ailing school districts.

A different subcommittee targeted the same pension money for use in local infrastructure and other projects.

Tinkering on the stimulus plan, known as House Bill 645, will continue in the House Appropriations Committee next week. The stimulus bill is then expected to have a floor vote in less than two weeks.

Appropriations Committee Chairman Jon Sesso, D-Butte, said he doesn’t think much of the stimulus money will need to be specifically rerouted to back-fill areas in the main spending plan.

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