A new budget analysis projects that the state’s general fund balance will fall by more than half by the end of 2017. That’s because state revenues are expected to continue declining into the next fiscal year.
State Financial Division staff will discuss the expected drop of around $140 million in the general fund balance at a Legislative Finance Committee hearing Thursday.
The last fiscal year ended with a $255 million balance. By end of fiscal year 2017 that amount is projected to drop to around $109 million.
In the past ten years, the Legislature and governor have budgeted ending fund balances at or above $250 million.
When the budget was created last session, the ending fund balance through 2017 was anticipated at over $300 million.
The report by fiscal division staff says if the lower revenue trends continue, the administration will have to look for ways to cut expenses.
The state’s revenue shortfall is attributed mostly to lower-than-expected growth in individual income tax revenue, and declines in corporate income tax and oil and natural gas taxes.
Lower collections from coal and metal mines make up most the state’s remaining revenue losses.
The interim committee’s two-day hearing on finance will also include an update of Montana’s Medicaid Expansion through the HELP Act.
