State Finance Officials Optimistic About Montana's Budget Amid Coronavirus
State finance officials are generally optimistic about Montana’s budget despite projected revenue impacts from the novel coronavirus-related economic slump.Governor’s Office State Budget Director Tom Livers told interim legislative committee members Tuesday that strong cash reserves place Montana’s finances in a “manageable” position, particularly compared to other states.
“Which is pretty remarkable in the face of a global pandemic. We were able to enter this in an incredibly strong fiscal position, and that gives us tools to manage some pretty tough times," Livers said.
A Legislative Fiscal Division report suggests the state can use $73 million from the budget stabilization reserve fund, a state savings account, to offset expected revenue drop-offs during fiscal year 2021.
Quinn Holzer, with the fiscal division, said the state is already projected to save $100 million in general fund spending, largely due to unused spending authority in the Department of Public Health and Human Services. Earlier during the pandemic, Gov. Steve Bullock said he asked department heads to take steps to cut spending, including leaving vacant positions unfilled.
Overall, Legislative Fiscal Division Director Amy Carlson said the bulk of negative revenue impacts will come during fiscal year 2021.
“CPAs are really saying by and large people aren’t going to make a big change in fiscal ‘20 or calendar year ‘20 incomes or revenues,'” Carlson said.
The Legislative Fiscal Division report projects income tax revenues will fall more than 16 percent during fiscal year 2021. Corporate tax revenues are expected to drop 32 percent over the same span.
Echoing calls among Republican legislative leadership to cut state spending, Senate Majority Leader Fred Thomas, Tuesday, expressed concern that agencies haven’t done more in the short-term to mitigate expected revenue shortfalls caused by the pandemic.
“I just think this should be looked at far more strongly so that we aren’t pushing the ball into next session and having a huge problem to deal with then, because we didn’t act now," Thomas said.
Budget Director Livers said state spending would need to be cut by about three percent during fiscal year 2021 if $73 million in budget reserves aren’t tapped.
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