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Montana budget forecast sees red

 

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A new budget forecast indicates that state coffers will run into a deficit by the middle of 2011 — a forecast the governor's office called irrelevant even as it makes plans to start cutting agency budgets. The Legislative Fiscal Division reported Monday that tax collection trends indicate the state will be in the hole more than $60 million when the budget period ends in the middle of 2011. It is the latest in a string of forecasts describing an increasingly bleak budget picture as weak tax collections show no sign of improving. The governor's office pointed out that the state still has $324 million in the bank. It recently predicted that the projected balance by the middle of 2011 is about $5 million. Gov. Brian Schweitzer has started making plans for budget cuts and has received plans for chopping up to five percent from his state agencies. Monday ' s r e p o r t f rom t h e Legislative Fiscal Division doesn't take into account any budget cuts. The analysts said that corporate and individual income tax collections are weak, as are other areas like vehicle license fees, oil taxes and gambling taxes. Schweitzer and the Legislature estimated that there would be a surplus of almost $300 million left by the middle of 2011 when they set the state's two-year budget early last year. That has changed significantly. "The potential shortfalls discussed above would decrease this projected balance to negative $62.5 million," wrote Terry Johnson, principal fiscal analyst for the legislature. Schweitzer has not been pleased with the string of predictions from the Legislative Fiscal Division. He lampooned them as frequently wrong — even though his past estimates used in his own budgets have often been equally as wrong. On Monday, his budget director was curt with his response to the latest figures. "These numbers are not relevant because they rapidly change," said David Ewer. "These revenue estimates keep changing, and they will change." Ewer said he didn't know when he would be doing another analysis of his own. The governor's office is required to cut the budget if it believes the projected bank account balance is less than $35 mi l l ion, a process that already has begun. But the exact amount the governor chooses to cut — and how much is believed will be in the bank — are determinations left up to the governor. Senate President Bob Story, R-Park City, said the governor's office might not be willing to recognize how poor state finances will become. "I agree with them that things keep changing. But unfortunately they keep changing for the worse, and that seems to be the trend," Story said. "I guess they are reluctant to admit things are worse than they predict them to be."

 

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