State tax revenue $40 million higher than expected

State tax revenue $40 million higher than expected

HELENA (AP) - State tax revenues are running $40 million ahead of projections for the current fiscal year, new figures show.

That's good, says a legislative analyst, but it won't last.

''There are definitely some (higher) expenditures that we have to factor in,'' said Terry Johnson, principal fiscal analyst for the Legislature.

He said likely cost overruns are expected in forest firefighting, the state prison system and state district courts.

Nonetheless, state tax revenues for the current fiscal year are coming in much higher than anticipated by the budget approved by the 2003 Legislature. Johnson said he doesn't know exactly why income tax revenue is up 10 percent over last year, instead of the 4 percent projected by the Legislature, but it may have something to do with last year's federal tax cuts.

Chuck Swysgood, the governor's budget director, also said it's too early to judge the health of the state budget for the 2004-2005 biennium.

''There are some bright spots out there, but there are an awful lot of risks out there - the big one being fire costs,'' he said Monday. This summer, the state won't have a big pot of extra federal money like it did last summer, he said.

''If we have a fire season like we had last year, certainly that's going to erode any positive (revenue), depending on the degree of the cost,'' Swysgood said. ''This (spring) weather has been really helping us out, to date.''

The Martz administration must prepare a proposed state budget for the 2006-2007 biennium. The governor will sign off on the budget plan in November and give it to her successor, who will then decide what to propose to the 2005 Legislature.

Swysgood said he's telling state agencies to ''be as frugal as possible'' in their budget requests for the next biennium.

Oil and gas revenue also is up $11 million over last year, and could be substantially higher once collections are in for the fiscal year, Johnson said. Part of that increase is because of higher oil and gas prices, but there also has been increased oil production in Montana, he added.

And gambling revenues may be as much as $5 million ahead of projections as well, Johnson said.