By Phil Drake | Montana Watchdog
HELENA – Montana is expected to end fiscal 2013 with a fund balance of $412.4 million to $480 million, a report that was received Thursday as good news — and then promptly sparked controversy about how to produce more accurate budget projections.
Legislative fiscal analyst Terry Johnson also told members of the Revenue and Transportation Interim Committee that the ending fund balance for FY 2012 was $457 million — $268 million over what was estimated in the 62nd legislative session.
While the report came as welcome news to the panel, it also fueled debate between the governor’s office and the legislative fiscal division.
In late July, Gov. Brian Schweitzer took political jabs at adversaries, announcing that his budget director had estimated the state had a $453 million ending fund balance at the close of the fiscal year. He said his comments were the beginning of his “I told you so” tour.
At one time the Legislature and governor relied on the state budget director to give a financial picture for Montana. In 1975, the Legislature added its own fiscal staff.
While the governor took credit for the state’s healthy financial picture, GOP lawmakers said the Legislature deserved credit.
At Thursday’s meeting, Johnson said $113 million of the increase above the FY 2012 estimate included $89.5 million in individual income tax, $12.8 million in corporation tax and $10.7 million from remaining sources. However, when balanced against underperforming revenues (such as vehicle fees and oil and taxes on natural gas production), the net General Fund revenue change is $85.3 million.
Johnson said the miscalculations were from using base data from the recession years to make projections. More recent revenue numbers from 2011 and 2012 won’t be available until November.
The committee took no action on Johnson’s report Thursday.
Johnson’s presentation echoed comments made in a June 12 Legislative Fiscal Division report which said the estimated balance was a “refreshing change” from two years ago.
In that report, Johnson said part of the increase was tagged to slower spending growth rates and slower Medicaid growth rates. There was also some spillover from the booming North Dakota oil fields.
Rep. Mike Miller, R-Helmville, said Thursday he feared a repeat of 2008, when legislative estimates projected the state could have an ending fund balance as high as $700 million only to have it whittled down when the recession hit.
But Johnson said he expected the state to finish the second year of the biennium with a healthy fiscal condition.
“Things would have to change dramatically in the next 10-11 months,” he said.
Contact Phil Drake at email@example.com or (406) 442-4561.