HELENA (KPAX) — Montana lawmakers have confirmed the state’s estimated revenue for the coming years, setting the stage for budget negotiations in the 2023 legislative session.
“I think it only makes sense that we’re going to be talking about the revenue estimate here this fall — let at least give you a recommendation of a starting point before we start talking about the details of the budget,” said Ryan Evans, associate director the Governor’s Office of Budget and Programming.
State analysts largely agree that Montana expects about $7.5 billion in general fund earnings over the next two fiscal years. However, they still recommend that executives prepare for volatility in what they bring to the table.
Both the OBPP and the Legislative Fiscal Division produced independent revenue estimates and they were very similar – differing by only about 1%. On Thursday, the Montana Legislature’s Revenue Interim Committee unanimously passed the projected LFD numbers, the lower of the two numbers.
The figures approved by the committee show expected general fund revenues of $3.80 billion for fiscal 2023 – the current year ending June 2023 – $3.71 billion for fiscal 2024 and $3.78 billion for dollars for fiscal 2025. They also forecast a tentative ending fund balance of $1.85 billion.
Analysts expect Montana’s ongoing general fund income to fall this year — largely due to the projected $360 million in individual income tax receipts — before starting to grow again in 2024. They believe the recent huge increase in income tax was due to shifts in capital gains and IRA revenue, and that it was due to a large amount of “one-off” funds – such as
During Thursday’s meeting, analysts stressed their expectations that some revenue streams could be unpredictable this year and therefore subject to short-term volatility.
“Are you dying to own all this revenue?” asked Amy Carlson, LFD Director and Legislative Financial Analyst. “Perhaps you should think about this carefully because I think there is still a risk. While that’s our best guess, it doesn’t mean those funds are coming in.”
Sam Schaefer, a senior financial analyst for LFD, encouraged lawmakers to keep tabs on revenue throughout the session because updated numbers for collections could significantly change the financial picture.
“This would be a good session to just keep at it,” he said.
The legislature agreed.
“I think we all realize how much this is likely to fluctuate over the course of the session,” said Sen. Greg Hertz, R-Polson. “We’ll probably make some adjustments to it.”
Gov. Greg Gianforte’s full budget proposal, including OBPP’s revenue estimates, was released this week. LFD’s sales estimates are available on their website.