By BOB ANEZ/Associated Press Writer
HELENA - State government reached the end of its budget year with $131 million in the bank on June 30, more than $70 million beyond what was expected when lawmakers approved the budget last year.
About 80 cents of every extra dollar comes from increased collections of individual income taxes and oil and natural gas production taxes, according to figures released Tuesday by the Martz administration.
If applied to the forecasted budget balance for mid-2005, the next Legislature could start the new two-year budget period with a $123 million surplus. That's a far cry from the more than $200 million shortage that confronted the last Legislature and a big turnaround from speculation just a few months ago that the 2005 session could face at least a $100 million deficit.
But state officials preached caution about the upbeat budget report.
Chuck Swysgood, budget director for Gov. Judy Martz, said the windfall does not mark a new era in government revenue growth. The 8.5 percent rise in income taxes and the 53 percent jump in oil and gas taxes cannot continue.
''I just don't see that 8.5 percent growth is sustainable in this economy,'' he said, adding that the skyrocketing price of oil fueling the increase in production taxes is unlikely to hold for long.
''You can't rely on all that being ongoing revenue,'' said Swysgood, whose office in the process of piecing together a new two-year budget for the next Legislature to consider.
He said he would be reluctant to commit much of the extra money to continuing government programs because he is unsure how much of the windfall is temporary.
He warned that much of the additional money could be consumed if the wildfire season turns ugly or the next Legislature has to fill funding shortages for key government programs such as district courts.
Terry Johnson, chief revenue analyst in the Legislative Fiscal Division, said a failure of tax collections over the next year to keep pace with forecasts could offset some or all of the gain made last year.
He attributed the $47.3 million increase in income tax collections to three factors. Federal tax cuts last year reduced the amount of money Montanans can claim as a deduction on their state returns, causing an increase in the state taxes they paid, he said. Growth in wages and investment earnings also contributed, he added.
Johnson agreed with Swysgood that the high price of oil - more than twice what state officials had expected - is behind the $14.4 million increase in oil taxes.
Swysgood said higher collections from vehicle registrations, video gambling and lottery sales account for about $12 million of the overall increase in revenue.
Swysgood and Johnson differed over the actual amount of the higher tax collections due to apparent differences in accounting. Swysgood said the figure was $77 million; Johnson said $71 million.
