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Montana politics, elections and legislative news

Montana Lawmakers Clash Over State Revenue Estimate

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Montana Legislature
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Lawmakers are considering whether to increase the amount of revenue the state of Montana is projected to collect in taxes and fees over the coming three years.

The revenue estimate is an important number for lawmakers to consider as they craft the state budget and consider tax cuts for the coming two years.

The proposed figure is the latest compromise.

Lawmakers rely on revenue projections from the Legislative Fiscal Division and the Governor's Office of Budget and Program Planning. Then they pick a number. A joint subcommittee agreed to a number last Friday and it was the subject of Monday's hearing.

"That recommendation is about $232 million higher than the estimate prepared by LFD and about $82 million lower than the estimate prepared by OBPP. This is a political compromise," said House Taxation Committee Chair Mike Miller.

His concern is the amount of money the state is projected to receive in taxes and fees is too high.

"However the political reality is that this estimate along with the recommended changes from the subcommittee that I bring before you today is a major part of what is required to avoid the governor's veto of HB 2. The recommended estimate adds about $43.6 million to the current estimate from the RTIC that was already politically adjusted."

House Bill 2 is the state's main budget. RTIC is the interim Revenue and Transportation Interim Committee. That panel is charged with coming up with a starting point for the budget discussions.

The recommendations come from analyzing past and current tax and fee collections and then forecasting into the future, taking into account advice from national and state economists.

During an informational meeting last Friday, economists from IHS and the Bureau of Business and Economic Research told lawmakers to expect slower growth in Montana. They point to the low oil prices and expected fall in cattle and grain prices. They say that could translate into sluggish individual and corporate income tax collections.

The message is a contrast to the one from the Bullock Administration. State Budget Director Dan Villa argues that doesn't square with the current data. Villa argues the U.S. and Montana economies are in the midst of an expansion.

"I think its best if we not govern by anecdote.I think its best we govern by the data that is actually shown," Villa said.

This includes actual tax collections and tax refunds by tax type as well as wage growth.

"We have access to see, both your staff and mine, what are the real time W2's. What are people's real wages looking like? Those aren't seen by the folks who want to rein gloom and doom on us."

The House Taxation Committee is expected to vote on the revenue estimate recommendation Thursday.

Since the House has already transmitted the state budget, House Bill 2, to the Senate. The Senate Finance and Claims Committee can take the revenue estimate under consideration.

The 2015 session is scheduled to conclude at the end of April.