Montana lawmakers took the first step in creating the state’s budget Monday.
The nonpartisan Legislative Fiscal Division and the governor’s budget office both analyze the state’s revenue trends and offer up estimates before each legislative session.
Analysts agree the state is expected to bring in around $8 billion in general funds through 2026 and 2027. Data from both departments also show current revenues are 9% higher than expected in the last budget.
However, the executive budget office’s future revenue estimate is 2% lower than the fiscal division’s. Ryan Evans with the budget office says that’s a marginal difference in the big picture, but as a line item, it’s about $216 million.
“It has huge budget implications,” Evans says.
The Revenue Interim Committee voted Tuesday to adopt the fiscal division’s larger estimate preliminarily, and then come back next week after further reviewing data from both departments. They could adjust the official projection then.
Outside of the final total, all analysts agree Montana’s revenue is strong. Income tax revenue now makes up the majority of the state’s general fund, the money lawmakers have the most latitude to spend. Analysts say that carries risk as a recession could severely reduce revenue.
The state Department of Revenue is projecting residential property taxes to increase by about 11%.
The state Legislature could vote to limit that, but some lawmakers weren’t sold on that proposal. Republican Sen. Jeremy Trebas from Great Falls said the burden would shift onto business, agricultural and industrial property taxes.
“I have to ask, what do they do? What do those commercial, industrial, what do those businesses do? They increase prices that we pay.”
Democrats have heavily criticized the Gianforte administration and the Republican-majority Legislature for not limiting property tax hikes last session. The revenue department had projected a 43% increase in taxable values then, and tax hikes ensued for property owners across the state.
Lawmakers will decide how to spend the state’s money and tax Montanans after the session convenes in January.
