Forecasts Predict Decline In State Revenues In 2021
Montana lawmakers in the Revenue Interim Committee reviewed revenue forecasts Thursday that will help guide state budget decisions during the 2021 legislative session.
In a year filled with economic uncertainty and a recession due to the coronavirus pandemic, state financial experts warn that some impacts to the state budget remain to be seen.
As it stands now, those experts are predicting that Montana will see a decline in revenue in 2021, but it’ll begin to grow again by 2022.
Legislative Fiscal Division Director Amy Carlson noted that the state’s rainy day and firefighting funds are full, and the general fund balance is in a strong position.
"So all of that together is positive and gives us an opportunity to weather whatever storm we’ve got going, but there may be storms that we’ll be seeing."
According to the Montana Department of Labor and Industry, the state’s unemployment rate reached 11.9 percent in April. That number bounced back to a healthier 5.3 percent in September. Carlson said this was a swift recovery.
However, Sam Schaefer with the Legislative Fiscal Division warned that the economy could take another nose dive if circumstances change.
The governor’s budget office also released a revenue estimate this week that projects less money coming into the state than the fiscal division’s by about 2 percent. Lead analyst for the budget office, Ralph Franklin, said a 2 percent difference isn’t a big deal.
“I just can’t reiterate enough that statistically our number is virtually identical."
Revenue committee members adopted an estimate to use next session that assumes the state will bring in about $7.5 billion over the next three years. That’s a more conservative estimate than the $7.8 billion offered by the legislative fiscal division.
Outgoing Democratic Gov. Steve Bullock released a proposal earlier this week that he says will balance the budget without having to raise taxes or cut services.
Republican Gov. elect Greg Gianforte will be able to amend that proposed budget when he takes office in January.