Montana lawmakers start debating how to use projected budget surplus of more than $1 billion
HELENA — Montana leaders say that with rising state tax revenue, there could be a large budget surplus in the state’s next legislative session in January. Now lawmakers are already starting the debate on how that money should be used.
“There’s a lot of grain in the grain silo, and it’s time to give that grain back to the people who put it there in the first place,” Rep. Mary Caferro, D-Helena, said Wednesday.
Democratic lawmakers held a press conference at the State Capitol to outline their plan to spend $1 billion on the $1.7 billion general fund balance they expect. Much of it would be used to meet rising housing costs.
“Make no mistake: this is an immediate crisis,” said Sen. Pat Flowers, D-Belgrade. “It’s not something on the road; it’s happening now. It affects our neighbors.
Under their plan, $500 million would go to a program to provide low-interest loans to developers building affordable homes. It would be based on the Multifamily Coal Trust Homes program, which has supported six affordable rental properties with $15 million in public funding.
$250 million would be used for property tax relief: providing a one-time tax refund to working Montanese and establishing ongoing relief by requiring families’ property tax bills to remain below a set percentage of their income.
The Democrats’ plan would also commit $125 million each to child care and community mental health treatment, expanding access and offering wage increases.
“We have to do it now; we need to start working on those policies,” said House Minority Leader Representative Kim Abbott, D-Helena. “And our vision is that we invest in our communities, and we put the money that’s left in the bank, unused, right now, to work for our constituents, for our communities and for our economies.”
Democrats are in the minority in the Legislative Assembly, and many of these proposals are based on ideas they have unsuccessfully proposed in previous sessions. Abbott said they hope majority Republicans will engage with their proposals and offer comment.
“$1.7 billion – we have to distribute it in the communities,” Abbott said.
Republican leaders say they are also preparing for a surplus of more than $1 billion, which they see as a sign that the policies they have implemented have worked.
“As Republicans, we know our citizens trust us to manage our economy,” said House Majority Leader Rep. Sue Vinton, R-Billings.
Vinton said they’ve had discussions with their caucus and are focusing on ways to return the surplus to the Montanese who created it. She said tax relief would be a priority, and that could include some form of property tax assistance.
“Certainly, we hear from our constituents every day about taxation and the hardship they are incurring due to high taxes, so we will be discussing tax relief in many forms,” she said.
However, Vinton said GOP leaders want to be careful about how the surplus is used — especially when it comes to ongoing spending.
“Using a budget surplus for an ongoing program is, in my view, not sustainable,” she said. “So we have to be very thoughtful and very careful about how these excess funds are used.”
In June, the Legislative Tax Division published a detailed report which shows the expected surplus – $1.7 billion by the start of the 2025 biennium. LFD said the general fund balance would likely be much higher than originally planned due to stimulus federal economy, a rise in the stock market in 2021 and inflation. The report projects revenue will decline in fiscal 2023, following two years of strong growth.