MTPR

House Committee Adds Projected Revenue Increases Into State Budget

Apr 6, 2017

Lawmakers voted Thursday to bank on a projection that state revenue will increase substantially in the next 3 years to help balance the state budget. Democrats called that reckless.

The House Taxation Committee voted to incorporate into the state budget bill nearly all of the money the latest state revenue forecast says will come in. That's an additional $100 million compared to an earlier estimate, from the beginning of the legislative session.

When the revenue projection was released by nonpartisan researchers in the Capitol in March, Governor Steve Bullock's office criticized it for not being reliable, and suggested lawmakers not use any of the projected increase in the budget bill.

But, Republicans on the committee, including Representative Greg Hertz from Polson, showed more confidence in the projections. Hertz says the governor's office is urging legislators not to accept the revenue forecast because the office wants tax increases instead. Hertz says those taxes aren’t needed:

"We are exactly where we need to be. We got House Bill 2 across the Senate floor, we are very close to getting out of this session," Hertz said.

Democrats on the tax committee like Tom Jacobson from Great Falls called the vote to accept the projection reckless:

"There are things we should be looking at. We could wait until we get all of our income tax returns done. We could be looking at more accurate year to date numbers," said Jacobson.

Several Democrats on the committee asked for more time to consider the revenue projections and to wait until some of the forecast becomes actual revenue.

But Republican Committee Chair Jeff Essmann declined those requests because he says some revenue and taxes won’t come into until long after the legislative session ends.

"We can’t wait that long," Essmann said. "We have to go with the best information we have."

Governor  Bullock said the vote was motivated by politics and the revenue forecast is too optimistic. He says if those projections don’t pan out, it could push the state's general fund too low and he would be required by law to call lawmakers back to Helena to make cuts to state agencies.

"If the legislature walked out, passed House Bill 2 tomorrow, didn’t do anything more with revenue, they would be walking out of guaranteeing that we would be walking back in here a some point over the next two years for a special session and I don’t think that is how you manage a budget," Bullock said.

The revenue projection will now go to the House floor for debate.