Gov.'s office to keep reserves of $250M

Gov.'s office to keep reserves of $250M

MATT GOURAS Associated Press Writer HELENA

The governor's office says it stands firm on large reserves in the budget but doesn't have an issue with projections showing that ongoing revenue might not be able to keep up with future government expenditures. Budget Director David Ewer spoke Wednesday morning with the Senate committee that is starting work on the main two-year budget bill of $8.1 billion that has already cleared the House. Ewer said he understands the Senate will play around with the details but said the administration is determined to keep projected reserves of $250 million. "We stand fully beside that objective," Ewer said. Republicans who control the Senate and the Senate Finance Committee have also expressed support for that objective. But disagreement is brewing over a technical issue that could lead to more budget cuts in the Senate. School advocates are already worrying the cuts could come out of education, which takes up half of the overall budget and most of the new spending. Current projections show that, at the end of the budget cycle, the state will be spending a little more than it gets in tax revenue under the House plan. Republicans in the Senate say they don't like that. Ewer, however, said the so-called "structural imbalance" is OK because the future revenue projections will inevitably change. "They are only estimates, and it is something that is two years out," Ewer said. But Republicans in the Senate argue that failure to match government program spending with future revenue projections could make it difficult to balance future budgets. "I guess my thought, and the thought of many on the committee, is that we need to get closer to structural balance," said Sen. Keith Bales, R-Otter. The budget passed by the House spends $8.1 billion over the next two years, including $3.3 billion in state tax money. Spending goes up $141 million compared to the previous two-year budget period.