HELENA — The Montana Senate on Tuesday approved a $10.3 billion budget for the next two years. But the budget picture is far from settled as the House and Senate must now iron out differences over the spending plan and make additional tweaks to get the governor’s signature.
Still at issue is just how much will be left in reserves to maintain government services in case of unexpected expenses or sharp downturns in revenues.
Legislative Republicans have rejected Gov. Steve Bullock’s request for $300 million and are instead setting aside $200 million for a so-called rainy day fund.
“We don’t see the $300 million within striking distance at this time,” said Sen. Llew Jones of Conrad, who chairs the Finance and Claims Committee. He added, however, that “the pieces are coming together for a $200 million ending fund.”
While Senate Republicans say they have the minimum $200 million already built into their version of the budget, the governor’s budget director, Dan Villa, warns that Republican lawmakers could be making shaky assumptions.
“They have a political objective that they need to fulfill. Their target is $200 million, but they’re building their budget on the assumptions that will get them there,” Villa said.
Central to the Republican strategy has been to keep spending down.
In a meeting with reporters after the 29-20 vote that moved the budget forward, Jones and other Senate Republican leaders said they delivered on their priorities of keeping the budget tight and the party disciplined in voting down more than $50 million Democrats sought in additional money for health care, education and other programs.
But Republicans are also counting on a scenario that includes improved revenues, after a slide in energy revenues that prompted the current spate of belt tightening. Rosier revenue forecasts for the next three years have boosted optimism.
A status report released last week projected a General Fund balance of $154 million after the end of the 2019 fiscal year.
But Senate Majority Leader Fred Thomas, a Republican from Stevensville, said revised revenue estimates would bump up that figure by $100 million. Pending legislation that seeks to retain about $23 million in property taxes will further add to the state’s reserves.
Because of the higher revenues, Thomas and Republicans would scrap a cigarette tax hike that would have raised $68 million.
In the end, the Republicans said their budget plan would create about $209 million in reserves.