As we move through the Christmas season, I hope you’re finding time for what matters most—family, friends, and fellowship. I spent the week before Christmas in Helena in long days of budget meetings—going line by line through Montana’s year-end finances to prepare for the new year. That’s how Montanans do things: you make sure you’re ready before the weather turns.
This week the Legislative Finance Committee reviewed the FY 2026 financial report. Bottom line: the “record surplus” era is cooling off. Montana’s budget picture is tightening as economic conditions shift and major tax reductions take full effect. That’s not a reason to panic—but it is proof that planning matters.
The latest figures project the FY 2027 general fund ending balance at $362.4 million, down from last fall’s FY 2025 year-end figure of $591.7 million. We’re still above recommended operating reserves—but the direction is unmistakable: balances are coming back to earth.
Federal changes are squeezing Montana from both sides—less revenue coming in and more costs shifting to the state, including H.R. 1 income tax reductions and new healthcare expenses. With slower economic growth, the squeeze is real.
The more important story isn’t one balance number. It’s the structural picture. Starting in FY 2027, ongoing revenues are projected to lag ongoing expenditures by about $35.8 million—roughly a 1% gap. That’s the kind of gap that grows if you pretend it isn’t there.
And yes, 2027 is when more tax cuts hit the books. HB 337 reduces revenue by another $191 million in FY 2027. I supported tax relief for working Montanans, small businesses, and producers. But tax relief only lasts if spending stays disciplined—which is why I partnered with Governor Greg Gianforte and solution-oriented legislators to hold all-fund budget growth to about 0.7% this biennium, as confirmed by both the Legislative Fiscal Division (LFD) and NASBO.
Hard times always come. That’s why real rainy day reserves are critical—for families and for state government. On this front, I partnered with Governor Gianforte and solution-oriented legislators to pass and fund Montana’s two key reserve tools—the Budget Stabilization Reserve (our rainy day fund) and the Growth and Opportunity Trust. These aren’t political props; they’re guardrails—built to keep Montana on solid fiscal ground when revenue drops, costs rise, and the economy turns.
Which brings me to the “slush fund” nonsense.
The Freedom Caucus calls these reserves “slush funds.” They tried to derail the GO Trust and cut reserves as we built them—and even now, as the budget tightens, they’re still pushing to repeal the GO Trust and shrink reserves. I’ll take fiscal discipline over D.C. chaos every time. Where I hail from, you don’t wait for the blizzard to hit before you’ve got hay put up. From my perspective, Montana needs fewer show-horse speeches and more workhorse budgeting that holds up when times get tight.
In Montana, we built reserves the way families do—setting aside funds in the good years using one-time surpluses—so we wouldn’t have to panic when the cycle turns. And now they’re showing real value. Take the Growth and Opportunity Trust (GO Trust): it’s designed to put one-time money to work on one-time priorities—without growing ongoing government.
As times tighten, GO Trust earnings can help rural Montana keep funding the basics—bridges and roads, water and irrigation, the childcare workforce, and long-term stability in housing and pensions—the kind of practical investments that help communities withstand the storm and come out stronger on the other side.
Looking further out, projections for the 2029 biennium are a flashing yellow light. By FY 2029, the structural imbalance is estimated at roughly $250 million—about a 7% gap—made worse by proposed federal actions that pressure both revenues and expenditures. Achieving a balanced budget in that environment will be a central focus of the 2027 Legislature.
A whole lot of legislators have never served through a true cut session—the last one was 2017—but they’ll likely face one in 2027. The difference this time is we’re better prepared, with reserves and trusts in place before the storm arrives. That means we can trim government without cutting to the bone, harming vulnerable Montanans, or eliminating essential services. Done right, a trim session protects the taxpayer pocketbook.
Bottom line: Montana’s budget is getting back to normal. That’s not a crisis. It’s reality. The conservative response is what Montanans already understand: prepare early, budget honestly, and keep a cushion for the hard winters.
As always, it’s an honor to serve you.
Llew Jones is a Republican state representative from Conrad and chairman of the House Appropriations Committee.