Montana state budget

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Montana ended FY 2009 on June 30, 2009 with a surplus of $369.1 million, an enviable postion compared to most other states, but expects a drop in revenues over the FY 2010 and FY 2011 biennium. Stronger than anticipated individual, corporation, and oil and gas production tax collections led to an ending fund balance 3 times higher than predicted in 2007, but now estimate a -5.2% drop in revenues over the 2011 biennium. The two-year budget passed by the Montana State Legislature and signed by Gov. Brian Schweitzer estimates General Fund revenue for FY 2010 and FY 2011 will total $3.6 billion (2008 & 2009 was $3.8 billion) plus the $369.1 million surplus provides $4 billion with $3.7 billion in appropriations, leaving an estimated ending fund balance on June 30, 2011 of $282.4 million.^[1]

The current budget includes $10.7 billion total state spending for the 2011 biennium - a 21.4 percent increase from the 2009 biennium. This increase is primarily due to the passage of federal economic stimulus legislation. General fund spending increase from $3.5 billion for the 2009 biennium to $3.7 billion for the 2011 biennium represents a 6.3 percent increase.^[2]

The state budget overview states, "The legislative budget reflects less optimistic revenue estimates as the economic outlook worsened. While there is a large fund balance carryover, funds available for ongoing services are limited if the general fund is to maintain structural balance (where ongoing revenues meet or exceed ongoing expenditures). Given the volatility of the economic climate the probability for additional revisions to the revenue estimates during this budget period is high."^[3]

[edit] Legislative 2011 Biennium Budget

"The Legislative 2011 Biennium Budget:^[4]

• Would finish the 2011 biennium with a $282.4 million general fund balance, before reserves, but could easily be impacted by further determination of economic conditions
• Proposes a general fund budget that is within about $4.4 million of being structurally balanced in FY 2011; however, this could easily be impacted with a further deterioration of current economic conditions
• Increases total general fund $220.7 million (6.3 percent) over the current biennium, and increases total funds $1,888.3 million (21.4 percent)
• Is predominantly a (present law) maintenance budget that funds existing services at revised caseload, population, and student enrollment levels – however, numerous across-the-board and unspecified reductions in the budget will likely result in a reduction in some state services
• Although structurally balanced in simple terms, there are a number of “one-time only” designated appropriations that would normally be considered ongoing, including a portion of the percentage Base Aid increase for schools, and pending liabilities, such as the unfunded liability in the pension funds, that will place strong pressure on the next legislature to fund
• Funds the budget with existing revenues, with no significant new tax policy recommendations other than mitigation of property tax reappraisal
• Includes over $1.3 billion of one-time-only federal American Recovery and Reinvestment Act (ARRA) funds in HB 645"

[edit] Budget Background

$3.7 Billion General Fund Spending includes:^[5]

• Public Education 34.7%, $1.28 billion
• Human Services 19%, $704 million
• Corrections 9.2%, $340 million
• Higher Education 8.1%, $300 million

$10.7 Billion Total Fund Spending includes:^[6]

• Human Services 29.7%, $3.2 billion
• Public Education 15%, $1.6 billion

Montana operates on a biennium budget. The biennium includes a 24-month period from July 1st of odd-numbered years to June 30th of odd-numbered years, such as the 2009-11 biennium, which runs from July 1, 2009 to June 30, 2011. According to state law the Governor is required to submit a budget recommendation to the Legislature by November 15 on even numbered years.^[7] The state Constitution gives sole authority to the Legislature to appropriate state funds. The House and the Senate review the recommended budget along with any requests made beginning January of the next fiscal year and additional revenue forecasts. ^{[8] [9]}

[edit] Budget figures

The following table provides a history of Montana's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See Montana state budget (2008-2009) for more details.

[edit] Accounting Principles

Tori M. Hunthausen is the Legislative Auditor. The responsibility of the Legislative Audit Division is to conduct financial and compliance, performance, and information system audits of state agencies or their programs, including the university system. Their audit reports are published online. The Legislative Auditor is solely responsible to the Legislative Assembly and is appointed by and operates primarily through the Legislative Audit Committee. The term of office is for two years beginning July 1 of each even numbered year.^[11]

Article V, Section 10(4) of the Montana Constitution mandates a legislative post-audit function. The Legislative Audit Act, contained in Title 5, chapter 13, MCA, establishes the Legislative Audit Committee of the Montana Legislature and the Legislative Audit Division. The Mission and Goals of the Legislative Audit Division include: provide the Legislature, its committees, and its members with factual and timely information vital to the discharge of their legislative duties. The Legislative Audit Committee is a bicameral and bipartisan standing committee of the Montana Legislature. It consists of six members of the Senate and six members of the House of Representatives. The Audit Committee appoints, consults with, and advises the Legislative Auditor. The Audit Committee reviews the audit reports submitted by the Legislative Auditor, releases the audit reports to the public, and serves as the conduit between the Legislative Auditor and the Legislature.^[12]

The Institute for Truth in Accounting (IFTA) rates Montana “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Montana's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[13] Montana's CAFRs are published online by the Department of Administration, State Accounting Division, State Accounting Bureau. Mr. Paul Christofferson is Administrator of the Montana State Accounting Division. The Accounting Bureau is responsible for the preparation of the CAFR and auditing all local government entities.^[14]

Montana currently has no statewide, official spending database online. On January 17, 2009, Montana Senator Joe Balyeat of Bozeman introduced SB 241, the "Taxpayer Right to Know Act." This bill would have created a searchable Website that, among other things, would have listed information about the state's budget. Data would have come from executive, legislative, and judicial agencies, and would have included appropriations, expenditures, and revenue sources. According to Senator Balyeat, that the taxpayers' "constitutional right to know where their money is going is something that we as the people's elected representatives, the legislature, believe is paramount," and "we believe this bill will do exactly that." Given that the "Taxpayer Right to Know Act" had over half of the legislature signed on as co-sponsors, the bill appeared to have had a high probability of passage. However, SB 241 died in committee,^[16] as did HJ 43.^[17] House Joint Resolution 43 would have mandated that Montana's Legislative Finance Committee evaluate what would be necessary to put a state spending site online. Both bills died in committee during the spring of 2009.

Recently, the Montana Policy Institute launched a website dedicated to bringing transparency to Montana. Visit the site here. Visit the homepage of the Montana Policy Institute here.

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 2000.^[18]
• An independent auditor’s report is published.^[19]
• It provides supplements to the budget workup.^[20]
• The budget is posted using organized and consistent methods of financial reporting.^[21]
• Montana law requires a balanced budget and a deficit is forbidden.^[22]
• It includes all costs incurred by the government, including long-term liabilities, starting on page 23 of the document.^[21]
• The CAFR compares estimated and actual budgetary numbers, such as on page 130 of the document.^[21]
• The Montana office was timely in submitting the budget.

[edit] The bad

• The CAFR is posted in a PDF format, so it’s not searchable online.

[edit] Economic Stimulus Package

Montana is expected to receive approximately $800 million from the $787 billion American Recovery and Reinvestment Plan. ^[23] According to White House officials the stimulus bill is estimated to create or save 11,000 jobs. ^[24] For more information on how the federal stimulus funds are being used in the state of Montana, visit the state recovery website.

According to preliminary reports Montana is expected to receive:^[23]

• $211 million for highways and bridges
• $79 million for clean water, regional water systems, and local sewer projects
• $53 million will be allocated to Montana for energy and weatherization
• $26 million for the Governor’s 20x10 energy conservation initiative
• $51 million for higher education
• $43 million for K-12 school infrastructure
• $12.6 million for job training and workforce development
• $5 million for broadband to connect rural areas
• $43 million to stabilize teacher retirement
• $10 million to preserve the distressed wood products industry
• $60 million for Medicaid

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[25][26]

Though Montana only has one Congressional District, the ARRP website shows it gave funds to 13 Districts. The twelve fictional Districts received $292,383,105 in funds to "create/save" a total of 1214.2 jobs.^[27]

[edit] Budget transparency

Montana currently has no statewide, official spending database online. On January 17, 2009, Montana Senator Joe Balyeat of Bozeman introduced SB 241, the "Taxpayer Right to Know Act." This bill would have created a searchable Website that, among other things, would have listed information about the state's budget. Data would have come from executive, legislative, and judicial agencies, and would have included appropriations, expenditures, and revenue sources. According to Senator Balyeat, that the taxpayers' "constitutional right to know where their money is going is something that we as the people's elected representatives, the legislature, believe is paramount," and "we believe this bill will do exactly that." Given that the "Taxpayer Right to Know Act" had over half of the legislature signed on as co-sponsors, the bill appeared to have had a high probability of passage. However, SB 241 died in committee,^[28] as did HJ 43.^[29] House Joint Resolution 43 would have mandated that Montana's Legislative Finance Committee evaluate what would be necessary to put a state spending site online. Both bills died in committee during the spring of 2009.

[edit] News

Recently, the Montana Policy Institute launched a website dedicated to bringing transparency to Montana. Visit the site here. Visit the homepage of the Montana Policy Institute here.

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

Mt.gov is the website for the state of Montana.

• Main article: Evaluation of state websites

[edit] The good

• Site has a search function and is fairly easy to navigate.
• Budget is published.^[30]
• Contact information for state officials is provided under respective office/agency.^[31]
• State tax information is available.^[32]
• Provides information on state ethics laws.^[33]
• Annual financial audit reports are published.^[34]
• Provides a full list of lobbyists and principals.^[35]

[edit] The bad

• Contract solicitations posted, but all state contracts are not available.^[36]
• Does not provide information on agency lobbying contracts, state-paid lobbying activity.
• Does not provide information on how to request public records under the Montana Public Records Act.

[edit] Legislation

See also: Montana Public Records Act

Senate Bill 241,^[37] the "Taxpayer Right to Know Act," would have created a spending transparency site. House Joint Resolution 43 would have mandated that the Legislative Finance Committee evaluate what would be necessary to put a state spending site online. Both bills died in committee during the spring of 2009.

[edit] Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

[edit] Independent transparency sites

Currently, the Montana Policy Institute has posted a transparency survey to determine what users wish to see in a transparency-focused website.

Additionally, the Montana Policy Institute has launched a website dedicated to bringing transparency to Montana. Visit the site here. MPI has also launched a site dedicated to education transparency, a site which "contains district level revenue and spending data in an easy to use format. You'll be able to compare up to five districts to each other and to state averages across several meaningful criteria. You'll be able to see revenue and spending trends for each district. And you'll be able to see just how difficult it is to get publicly available information about what your schools are spending your money on."

[edit] Public employee salary information

None.

[edit] Economic Stimulus Transparency

• The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[38]

• Montana will receive an estimated $603,398,241 ^[39]

• The economic recovery website to show how legislators and government officials in Montana are spending Federal funds is available here.

[edit] See Also

Montana taxpayer-funded lobbying

[edit] External links

• Model transparency legislation from the American Legislative Exchange Council is available at this link.
• Montana Policy Institute
• Montana Office of Budget and Program Planning
• Montana Legislature, Legislative Fiscal Division
• Transparency in Montana's Education, Montana Policy Institute

[edit] Additional reading

• State of Montana,"2011 Biennium Executive Budget"

[edit] References

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	v • d • e State of Montana Helena (capital)
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